U.S. stock futures are trading higher as the global stock market is on track to extend its eight-day rally. Investors are feeling upbeat about corporate earnings and the stimulus relief package.
The U.S. stock market snapped its six-day rally yesterday. The Dow Jones Industrial Average slipped 0.03% or nearly 9.93 points to 31,375.83. This was the index’s first daily loss in seven sessions. Seventeen shares of the Dow fell, and ten rose.
The S&P 500 also declined by 0.11% but still closed near its all-time high yesterday. The energy sector led the losses for the S&P 500. The Nasdaq Composite closed higher by 0.14%, and it is still maintaining its upward trend.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained more strength yesterday. 83% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth is maintaining momentum today despite its losses yesterday. 89% of the shares traded above their 200-day moving average.
S&P 500 Leaders and Laggards: TechnipFMC and Hanesbrands HBI
TechnipFMC stock contributed the biggest gain, soaring 6.69%. Hanesbrands stock was the largest drag; it fell by 24.9%. The S&P 500 stock index is up 4.13% so far this year.
Dow Jones Leaders and Laggards: Home Depot HD and UnitedHealth
UnitedHealth provided the biggest help for the Dow Jones; it advanced by 1.63%, while Home Depot was the largest decliner, falling by 1.16%.
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The Senate will begin its second Trump impeachment trial after affirming it on constitutional basis. The arguments would begin today if Trump incited an insurrection by inflaming the event that ensued at the U.S Capitol last month. The event is not likely to have any meaningful influence on the stock market as Trump is the former President and is no longer in the White House.
Stimulus Relief Package
President Joe Biden is trying his best to get his $1.9 trillion stimulus bill across the line. Biden has opened a conversation over this bill with a group of senators who want to cut down the president’s relief bill to just one-third. All efforts are being devoted to reaching an agreement, while there are concerns that the actual agreed stimulus package could be much smaller. So far, investors are betting big that the coronavirus stimulus relief bill will be the same as the proposed amount — $1.9 trillion. They believe this is one of the most important cures for the U.S. economy to return to its pre-Covid levels.
Eli Lilly’s stock is also likely to tick higher today as the FDA approved the antibody-drug that may help to combat coronavirus mutations under emergency use authorization.
In terms of economic numbers, we had the Consumer Price Index data today. The actual number came in line with the forecast of 0.3%, while the previous reading was at 0.4%. Later today, we also have the Fed Chair, Jerome Powell, scheduled to speak. His view about the economy will be monitored by investors and traders very closely.
Lunar New Year
Chinese traders will be away for the public holidays as the Lunar New Year season begins across Asia. This means that we are unlikely to have any major important news out of China that will influence the global stock market.
Oil prices are climbing once again on the heels of improving virus trends and hopes for supply to remain tighter. Later on today, we do have the U.S. Crude Inventories data, and the forecast is for -0.9M, while the previous reading was -1.0M. Any further improvement is likely to move oil prices higher. It is important to remember that oil prices have gone too far and too fast
Twitter: The company reported stellar revenue numbers yesterday. Twitter’s digital ad business brought solid numbers; however, the concern in Wall Street is that the company is not adding enough new users. Twitter warned that its expenses are likely to grow, but they will not outpace its growth — this is exactly the kind of message that traders like to listen to.
Cisco shares are under pressure as the company has failed to impress stock traders on its enterprise sales numbers. Investors are concerned that Cisco hasn’t been able to capitalize in a coronavirus work environment—the company has been weak in adopting changes according to new work behavior
Lyft stock is surging as investors like the fact that the company has been able to put its cost on a tight leash. Lyft shares are likely to remain in high demand today as the company believes that it will be able to produce a quarterly profit this year.
Uber will report its earnings after the U.S. market close. Investors are likely to focus on two factors: ride-sharing and cost-cutting. An area of growth where investors would like to see strong numbers will be from its food delivery arm, UberEats.