Stocks Up, But Still Waiting On $2 Trillion Relief Package
Stocks closed mostly higher yesterday, but well off of their intraday highs.
Momentum from Tuesday spilled into Wednesday's session on optimism that the Senate will finally pass their 'Phase 3' coronavirus relief bill, which has ballooned to nearly $2 trillion.
But late in the day, a perceived 'error' was spotted in the bill that would pay workers more money to not work than they would have made if they were working -- thus creating a potential incentive for some to actually get laid off. This derailed the bill's fast track path. But if it can be ironed out, it's expected to pass, where it will then make its way to the House, and then the President's desk.
On a positive note, yesterday was the first back to back up day for the market since the sell-off began. (Although, the Nasdaq just missed out as they were modestly lower yesterday.)
But all of the major indexes have so far seen big bounces from their lowest close on Monday with the Dow gaining as much as 18.43%. By the close however, the Dow 'only' finished up 14.03% from their lowest close.
The S&P bounced as high as 14.93%, before closing up 10.54% from their lowest close.
And the Nasdaq bounced as high as 11.81%, before closing up 7.63% from their lowest close.
I post these numbers because bear market rallies are common. And while there are plenty of great bargains out there, the bear market will not officially be over until it closes up by 20% or more from their lowest close. So keep that in mind.
Hopefully, we'll be able to see the market retest yesterday's intraday highs if the Senate can finally pass that relief package.
Traders will also be watching this morning's Weekly Jobless Claims. We all know they are going to be bad, with some suggesting we could see as many as 10 million new claims. We all know this is temporary and why it's happening. But it won't make it any less shocking to see such a big number, whatever it turns out to be.
We'll also get the final estimate for Q4 '19 GDP. That's expected to remain unchanged from their last estimate of 2.1%. But that's old news and it likely won't mean anything if it comes in as expected or better.
We'll also get Corporate Profits, Retail and Wholesale Inventories, and the Kansas City Fed Manufacturing Index.
But all eyes will be on the coronavirus relief bill and if Congress can finally get its act together and get this done.
In the meantime, the upheavals that the coronavirus outbreak, and subsequent social distancing policies have made clear, is that tech companies will play an even bigger part in our economy and lives than anybody could have ever possibly imagined.
And as these new technological advances come about, it will change the world we live in, and make properly positioned investors rich.
