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Equity futures rose Thursday night as traders examined the details of President-elect Joe Biden’s recently unveiled stimulus proposal and assessed the likelihood of the package moving forward quickly in Congress.
Contracts on all three major indices traded just above the flat line on Thursday night, shaking off the lows during the normal trading day. The Dow and Nasdaq hit record intraday highs earlier before closing lower.
Biden presented his $ 1.9 trillion coronavirus relief proposal on Thursday evening, which included a host of additional relief measures to add to the provisions included in the $ 900 billion package passed by Congress in December.
Biden’s proposal, called the American Rescue Plan, aims to offer stimulus payments of $ 1,400 to most Americans, increase enhanced federal unemployment benefits from $ 100 to $ 400 per week, and extend them until the in late September, and to provide $ 350 billion in aid to states and local communities. governments, which had been excluded from the last Congress package. He is also seeking to raise the minimum wage to $ 15 an hour, provide additional funds to schools, and step up testing and vaccination against COVID-19, among other provisions.
The overall size of the package was largely in line with what investors expected from the proposal, and would only be rivaled by the $ 2.2 trillion relief from the CARES Act last spring. The next key question for the markets is whether or not the package will progress in the near term, some experts have noted.
“We have to distinguish between will and ability. I have no doubt in my mind that the new Biden administration wants to go big. They want to make relief efforts, they want to make big money on infrastructure, they want to push for local and state governments, and for good reason, ”Mohamed El-Erian, president of Queens College at the University of Cambridge and chief economic adviser to Allianz, told Yahoo Finance on Thursday. “But they have a razor thin majority in Congress, razor thin in the Senate. And make it not easy. Add to that, there are questions about the impeachment process, questions about appointments, there is COVID.
“So I think the market has a very high price tag. This is what the Biden administration wants to do. The question that the market will have to face is the following: is it capable of doing so given what the Senate still has to examine in the weeks and months to come, ”he added.
Yet support for the financial markets and the economy has come from multiple fronts during the pandemic, and many members of the Federal Reserve, for their part, recently doubled their pledges to keep the policies of the Federal Reserve in place for the time being. crisis. Fed Chairman Jerome Powell told a webinar Thursday that he believes the US economy is still “far from our targets”, and that “now is not the time to talk about an exit” when it came to examining the Fed’s thinking around its massive, pandemic asset purchase program.
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6:01 p.m. ET Thursday: Stock futures open higher
Here are the major market movements, at 6:03 p.m. ET Thursday:
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S&P 500 Futures (ES = F): 3,794.75, up 3.5 points or 0.09%
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Dow Futures (YM = F): 30,932.00, up 23 points or 0.07%
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Future Nasdaq (NQ = F): 12,918.75, up 17.75 points or 0.14%
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