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Topline

The stock market is pulling back some of the new year’s gains as continued chaos in Washington yields short-term uncertainty, but markets are still laser-focused on the next round of fiscal stimulus and the start of earnings season.

Key Facts

Shortly after the market open, the Dow Jones Industrial Average had fallen 181 points, or 0.6%, while the S&P 500 and tech-heavy Nasdaq shed 0.8% and 1.5%, respectively.

Twitter’s shares are plunging 8% after the platform said it was permanently suspending President Donald Trump’s account Friday over fears he could incite further violence, raising questions over the type of precedent such a ban will ultimately set; Facebook and Snap are down 2%.

Meanwhile, shares of Boeing are down 3.5% after one of the firm’s passenger planes crashed into the ocean shortly after taking off from Jakarta, Indonesia–just days after Boeing said it would pay $2.5 billion to settle a criminal investigation into the development of its 737 MAX model.

Despite posting profit that clocked in at the higher end of prior guidance, Lululemon stock is down 4% due largely to Wall Street expectations of a bigger earnings beat. 

Heading up gains in the S&P, shares of drugmaker Eli Lilly, whose Covid-19 antibody treatment received FDA approval in November, are surging 14% following positive second-phase trial results showed an antibody in the firm’s pipeline significantly slows cognitive decline spurred by Alzheimer’s Disease.

Global markets were mixed Monday: While Japan’s Nikkei 225 ended the day up 2%, the United Kingdom’s FTSE 100 and Germany’s DAX index are down about 2%.

CRUCIAL QUOTE 

“After sprinting out of the gate to start 2021, stocks are taking a mild breather so far Monday morning,” noted Vital Knowledge Media Founder Adam Crisafulli Monday. “Investors are eagerly awaiting details on the Biden economic stimulus plan due out Thursday, the next round of Covid vaccine phase-three data and the start of fourth-quarter earnings.”

TANGENT

Upcoming earnings and economic data should give Wall Street more clarity on the impending recovery. Embattled cruise-line Carnival reports Monday, while similarly struggling Delta Air Lines posts Tuesday. Big bank earnings ramp up later in the week, with Charles Schwab and BlackRock on Thursday, followed by JPMorgan Chase, Wells Fargo and Citigroup Friday. This week’s economic data is headlined by Wednesday’s consumer price index release and retail sales on Friday.

WHAT TO WATCH FOR

There’s a lot going in Washington, D.C. this week, with House Democrats set to move forward on a second round of impeachment proceedings for President Trump as soon as Monday. More importantly for markets, however, President-elect Joe Biden is set to unveil details of a lofty new stimulus package on Thursday. Though he’s touted provisions including $2,000 stimulus checks and state and local aid, Biden has yet to say how much the new relief bill could cost. Morgan Stanley said last week it was expect up to $1 trillion in additional stimulus this year. 

SURPRISING FACT

The price of bitcoin, which has shot up during the pandemic on heightened inflation fears, is down a staggering 20% over the past 24 hours. 

FURTHER READING

Carnival, Delta And 3 Other Big Names Ravaged By Shutdowns Report Earnings Next Week–Here’s What To Expect (Forbes)

10.7 Million Americans Are Still Unemployed—Rate Stays Flat At 6.7%, But Economy Loses 140,000 Jobs (Forbes)

Stocks Add To Record Gains–Again–Despite Disappointing Jobs Data As Market Looks To Biden’s Stimulus Plan (Forbes)

Democrats In Control Could Usher In A Full Economic Recovery And Another $1 Trillion In Stimulus, But Here’s The Catch (Forbes)