(DAILY NOTION): Can The Biden Plan Be a Catalyst to Spur Wall Street Ahead? Next Mover: Big Banks’ Earnings Report

NASDAQ 100 (as of Jan 15, 2021 at 10.55 a.m.)

Source: Yahoo Finance

SPX 500 (as of Jan 15, 2021 at 10.55 a.m.)

Source: Yahoo Finance 

US30 (as of Jan 15, 2021 at 10.55 a.m.)

Source: Yahoo Finance

After a choppy day on Wall Street, the US 30 closed 0.36%, having given up gains from hitting an intraday record of 31, 223.78. Meanwhile, the SPX500 dropped 0.31%, and the NAS100 fell 0.12%. In the broader market, value stocks, which are stocks tied to the performance of the economy led gains. However, in the case of US30, technology stocks took a dip which pared gains from value stocks.

The initial jobless claims came in at 965,000 against an estimate of 789,000. However, this increase was primarily overshadowed by the anticipated unveiling of President-elect Joe Biden’s stimulus plan. The Biden plan, as it is known now, proposes a $1.9 trillion stimulus package, including $2,000 stimulus cheques.

The Federal Reserve (Fed) Chairman, Jerome Powell has predicted a surge in spending in the U.S. However, he did not predict an inflation spike.

Analyst Patrick J.O’ Hare from Briefing.com opines that a key takeaway from the report is the need for additional stimulus, adding on that bad news is being interpreted as good news. The announcement of the Biden plan has come in at the right time, as it took centre stage against worrying news of rising initial jobless claims, slow rate of vaccination, and President Trump’s historic second impeachment. As optimism fills the air, the question is, how long will it spur the risk-on sentiment in the market?

As the week closes, the earnings reports from big banks such as Wells Fargo, JP Morgan, and Citi would come under scrutiny. Traders would be keeping an eye for the potential restart of dividend payments as well as comments by company executives about this year. Kenneth Leon, the research director at the Centre for Financial Research and Analysis (CFRA), believes that management and analysts are not necessarily looking into the rearview mirror, but what into the future and how 2021 will look like.

Here’s to a strong closing of the second week of 2021.

FOLLOWME User Sentiment (as of Jan 15, 2021 at 11 a.m.)

SPX500

Short – 70.80%

Long – 29.20%

NAS100

Short – 70.93%

Long – 29.07%

US30

Short – 74.67%

Long – 25.33%