Stop me if you’ve heard this one before, but U.S. equity markets have reached and passed all-time highs as investors are pretty sure Washington lawmakers will pass a stimulus bill before the weekend. end. The S&P 500 and the Nasdaq both hit intraday and closing highs, and the Dow Jones posted its highest close ever. Home builders like Lennar Corp. and Pulte Homes led the gains, with Tesla joining the S&P 500 on Monday.
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The stimulus bill in question is worth around $ 900 billion and would include direct payments of up to $ 600 for individuals as well as $ 350 billion for small businesses. It’s a skinny version of what Republicans and Democrats wanted, but we should take it as an appetizer for a bigger bill once the Biden administration takes office.
The aperitif can’t come soon enough as 885,000 Americans first filed for unemployment last week – the highest weekly number since September (more below). Unemployment benefits for 13 million Americans expire at the end of December, unless a new bill extends them.
Investors have ignored this news since April. Markets were volatile in early December, but momentum is back in the stock market and December’s best trading days are just beginning.
Peak jobless claims
It is an unfortunate trend that is going in the wrong direction. The number of workers claiming unemployment benefits rose to a three-month high last week, another sign the economy is entering a winter slowdown as coronavirus cases rise and new trade restrictions are in effect in all the countries.
Initial jobless claims rose for the second week in a row to 885,000 last week, according to the Labor Ministry, marking the highest level of claims since September, when 893,000 workers applied for unemployment benefits.
As claims are down sharply from nearly 7 million in March, the four-week moving average is rising after trending down since the spring. This is due in part to a seasonal slowdown in hiring, but it is severely worsened by more business closures as cases of COVID-19 continue to reach record highs.