Shares drop following announcement of Biden’s proposed $ 1.9 billion recovery package

U.S. equity futures tend to move lower hours before the opening bell on Friday after President-elect Joe Biden announced plans to come up with a $ 1.9 trillion package to help the rally recover. coronavirus pandemic. Biden spoke about the plan after the market closed on Thursday.

Stocks in this article

$ 13,112.637463

-16.31 (-0.12%)

Biden’s coronavirus plan would include checks for $ 1,400 for individuals, in addition to the $ 600 provided in the latest COVID-19 bill. The plan would also extend a temporary increase in unemployment benefits and a moratorium on evictions and foreclosures until September. It is also providing funds for a mass vaccination campaign and a major expansion of local public health efforts.

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Markets have mostly risen in recent times in growing optimism that the deployment of coronavirus vaccines will pave the way for a big rebound in the economy and corporate earnings later this year. Expectations are also rising for another round of stimulus to come for the economy, as Democrats are expected to gain control of Congress and the White House soon.

Investors are hopeful that more government stimulus can revive the economy until COVID-19 vaccines return to normal and trigger a powerful recovery later this year.

But hopes are tempered by the reality that Biden may struggle to win massive spending support, even from some Democrats, analysts say.

“To a certain extent, most of this optimism had been taken into account, but the huge numbers had also prompted questions as to whether the necessary bipartisan support will materialize for this huge sum,” IG’s Jingyi Pan said in a statement. comment. seems to be playing it safe, ”she said.

Sentiment has also been clouded by US decisions to blacklist several Chinese companies. Chinese smartphone maker Xiaomi Corp., CNOOC, China’s third largest national oil company and aerospace company Skyrizon are the latest to be blacklisted or delisted from the US stock markets for suspected military ties. President Donald Trump’s administration has taken steps to increase the pressure on Beijing during its last week in office.

GET FOX BUSINESS ON THE ROAD BY CLICKING HEREMeanwhile, Asian stocks fell on Friday after a worse-than-expected US jobs report and a late fall in several Big Tech stocks left major indices lower on Wall Street.

Japan’s Nikkei 225 slipped 0.6% to 28,518.65 and Hong Kong’s Hang Seng slipped 0.3% to 28,405.72. In Australia, the S & P / ASX 200 was stable at 6,715.40. South Korea’s Kospi slipped 1.8% to 3,093.29, while the Shanghai Composite Index lost 0.6% to 3,543.64.

On Thursday on Wall Street, the S&P 500 was down 0.4% to 3,795.54. The benchmark was weighed down by losses from Apple, Microsoft and other big tech companies.

The Dow Jones Industrial Average slipped 0.2% to 30,991.52. The Nasdaq composite edged down 0.1% to 13,112.64. The indices are still close to their records from last week.

The retirement followed another disheartening report showing the damage to the economy as the pandemic worsens. Last week, another 965,000 American workers filed for unemployment benefits as businesses shut down and lay off workers. That’s up sharply from the previous week’s total of 784,000, and far worse than economists expected.

Small businesses have surged more than the rest of the market, as they often do when investors improve their expectations for the economy. The Russell 2000 Small Cap Index rose 2.1% to 2,155.35.

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The 10-year Treasury yield was 1.11% early Friday, down from 1.13% on Thursday but above its level of 1.07% the day before. The 10-year yield was 0.90% lower two weeks ago, before two second-round elections in Georgia gave Senate control to the Democrats.

In other trades, US benchmark crude oil fell 29 cents to $ 53.28 per barrel in e-commerce on the New York Mercantile Exchange. It climbed 66 cents to $ 53.57 on Thursday. Brent, the international standard, fell 46 cents to $ 55.96 a barrel.

The dollar slipped to 103.81 Japanese yen from 103.82 yen on Thursday. The euro weakened to $ 1.2139 from $ 1.2155.