U.S. Stock Futures Relatively Flat Amid ‘Finalized’ Stimulus Deals
This week in the stock market is set to be quiet as investors wind down for the holidays. All the major economic data and earnings reports will be concentrated on the first half of the week. The U.S. stock futures were relatively flat on Sunday evening as Congress reached a deal on COVID-19 aid package. The $900 billion package aims to support an economy, businesses, and individuals battered by the surging coronavirus pandemic. The votes could take place on Monday.
With only two trading weeks left to 2021, it’s worth having a look at how the major indexes have performed year-to-date. The S&P 500 is up 13.9% for the year, while the Dow has risen 4.5%. The Nasdaq Composite has rallied 40.3% this year as investors favored high-growth technology companies, particularly cloud-computing stocks.
Should the votes go in favor of the stimulus package, you could expect there will at least be a rally in this holiday shortened week. Of course, investors are hoping that it will happen. And many individuals are also hoping to have a slightly happier time this Christmas. But the reality is, the market can move in mysterious ways. Admittedly, nobody likes to say this. Despite optimism surrounding the stimulus deal, all major indexes are trading lower as at 7.57 a.m. ET. The S&P 500, Dow, and Nasdaq fell 1.71%, 1.46% and 1.02% respectively.
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Over the weekend, Moderna (MRNA Stock Report) received the emergency use authorization (EUA) from the FDA. With the green light, distribution is now underway. The initial shipments of the second coronavirus vaccine authorized in the U.S. had left the distribution center on Sunday. The much-needed vaccines are expected to be given starting Monday, just three days after the FDA authorized the rollout.
If you have been following the news, you may recall seeing that Moderna’s vaccines are easier to store in comparison to Pfizer’s. Moderna’s vaccines can be kept for 30 days in standard-temperature refrigerators. This compares with Pfizer’s vaccine, which can only be stored for 5 days in standard-temperature refrigerators. Pfizer’s vaccine also requires a temperature of minus 70 degrees Celsius for shipping. Therefore, it is not surprising that some states are choosing to use Moderna’s vaccines for rural areas. With this in mind, investors will also be paying close attention to any major side-effects that could possibly happen like the one we saw in Pifzer’s (PFE Stock Report) and BioNTech (BNTX Stock Report) jointly developed vaccine.
“The Moderna is kind of like an M&M and the Pfizer is like a Snickers bar. It’s just a little bit fragile,” Dr. Chin-Hong said. “It’s not as easily stored. Because it’s easier to store the Moderna you can use it in more rural communities it can stay in the fridge for a month instead of a few days.”
Tesla Is Now Part Of The S&P 500
Tesla’s (TSLA Stock Report) stock had one wild ride last week by closing at a record high. This came as investors scrambled to have a stake in the company before its inclusion in the S&P 500 on Monday. Tesla’s inclusion makes it the sixth-largest company by market cap in the index after Apple (AAPL Stock Report), Microsoft (MSFT Stock Report), Amazon (AMZN Stock Report), Alphabet (GOOGL Stock Report), and Facebook (FB Stock Report).
The largest EV manufacturer’s stock is up around 70% since the announcement of it joining the blue-chip benchmark. That latest leg of its bull run saw investors and market makers hoping to sell to S&P 500 tracker funds that needed the stock on Friday. Certainly, the addition of Tesla into the S&P would itself be an enormous trading event. On the other hand, it is worth watching out the rebalancing of all other existing constituents in the S&P 500. Some investors may still be bracing for volatility with Tesla stock.
JPMorgan (JPM Stock Report) is one stock that investors are going to pay a lot of attention to this week. This came after the investment bank approved a $30 billion stock repurchase program in 2021. The news came within hours after news from the Federal Reserve. It now allows U.S. banks to conduct stock buybacks limited by their income in 2020.
Many already know that JPMorgan CEO Jamie Dimon has been keen on share buybacks. That makes sense as JPM stocks are still down year-to-date. That’s despite the bank seeing strong second- and third-quarter earnings. Thus, with the green light by the Fed, investors are likely to flock in to buy JPM stock when the stock market opens today.
“We will continue to maintain a fortress balance sheet that allows us to safely deploy capital by investing in and growing our businesses, supporting consumers and businesses, paying a sustainable dividend, and returning any remaining excess capital to shareholders.”– Jamie Dimon, JPMorgan CEO
Earnings Winding Down
As Nike (NKE Stock Report) powers through the pandemic with its digital push, this shows us that there will always be a silver lining in a heavily battered economic environment. As we continue to wind down in the last two weeks of 2020, there are still big names reporting during this holiday-shortened week. These include Heico (HEI Stock Report), Carnival (CCL Stock Report), CarMax (KMX Stock Report), and PayChex (PAYX Stock Report). As such, if you are looking for the best-reopening stocks to buy amid nationwide vaccine roll-out, awaiting fiscal stimulus votes, or to follow earnings reports, these should be enough to keep you busy in this shortened week.