The stock market continued its positive momentum the past week on optimism surrounding additional stimulus measures, a solid start to the fourth-quarter earnings season and the continued rollout of coronavirus vaccines.
Investment banks JPMorgan and Citigroup led a group of more than 30 blue chip U.S. companies that are suspending or modifying their political donation strategies following the deadly riot at the U.S. Capitol on Jan. 6. Some companies have chosen to withhold funding only from members of Congress who objected to certifying the election, while others are temporarily suspending all political donations.
Twitter shares dropped more than 12% after the company permanently banned President Donald Trump from its platform due to concerns that his posts would incite further violence following the incident at the Capitol. Facebook, Instagram and YouTube have also joined Twitter in at least temporarily blocking or restricting Trump’s access to their platforms.
On Wednesday, a study published in the New England Journal of Medicine suggests Johnson & Johnson’s one-shot coronavirus vaccine candidate is demonstrating promising efficacy and safety data in its Phase 3 testing. Johnson & Johnson’s vaccine could potentially be the third approved by the FDA for emergency use to treat COVID-19, but Pfizer and Moderna’s vaccines require two doses each.
On Thursday, President-elect Joe Biden unveiled a new stimulus plan that includes up to $2,000 direct payments for qualified Americans. Even with Democratic support, the proposal will need at least 10 Republican votes to reach a filibuster-proof 60-vote majority in the Senate.
“I think by and large this is what markets were expecting in terms of size and some of the details,” said Sean Cruz, manager of trader strategy at TD Ameritrade. “So now it becomes a matter of how soon can it get through and do they need to make some changes to get the votes you need in the Senate.”
Cruz added that he expects the big hang-up to be around the proposed $15 per hour minimum wage.
Big banks kick off earnings
Big banks JPMorgan, Wells Fargo and Citigroup kicked off earnings season by reporting solid fourth-quarter earnings numbers on Friday.
Earnings season swings into full gear with reports from Bank of America and Netflix on Tuesday and IBM and Intel on Thursday.
Analysts are now expecting S&P 500 companies to average 0.4% revenue growth in the fourth quarter following back-to-back quarters of revenue declines, according to FactSet.
Investors will get key international economic updates on Wednesday when the People’s Bank of China announces its latest interest rate decision and on Thursday when the European Central Bank releases its interest rate decision and accompanying economic commentary.
Benzinga is a financial news and data company headquartered in Detroit.