US stock index futures rallied during Sunday night trading as the main averages appeared to be accelerating gains after the best week since November.
Futures contracts linked to the Dow got 75 points or 0.27%. S&P 500 futures were up 0.3%, while Nasdaq 100 futures were up 0.33%.
The S&P 500 closed at a record high on Friday, recording its fifth consecutive positive session for the first time since August. The Dow also has its longest daily winning streak since August, while the Nasdaq Composite recorded its fourth positive session in five on Friday. The technically heavy index also closed at a record high.
“We are still very much in a bull market in the early stages of an economic recovery that is gaining momentum,” Michael Wilson, chief US equity strategist at Morgan Stanley, said in a note to clients Sunday. “We will continue to recommend stocks with the most benefits against an improving economic backdrop as vaccines are distributed and normal operations resume,” he added.
All three major averages ended the week in green, with each posting their best week since November, when fears of the short squeeze in a handful of stocks leading to wider market contagion abated. The Russell 2000, meanwhile, has its longest daily winning streak since May, gaining 7.7% last week for its best weekly performance since June.
“Stocks continue to rise and are likely to reach the 4000 level for the S&P 500,” said JC O’Hara, chief market technician at MKM Partners. “Trends remain positive … The severity of the uptrend should continue to attract money quickly, but the longer term, patient money, will be kept on the sidelines until a downturn develops,” he added.
The Senate and House each passed a budget resolution on Friday, kicking off the reconciliation process that will allow President Joe Biden’s $ 1.9 trillion bailout package to pass through the Democratic Senate with a simple majority.
The package includes $ 1,400 incentive checks, supplemental unemployment benefits, and Covid-19 vaccine and testing funds.
Treasury Secretary Janet Yellen said on Sunday that if Biden’s stimulus plan is passed, the US could be fully operational again by 2022.
“There is absolutely no reason why we should have a long, slow recovery,” Yellen said during an interview on CNN’s State of the Union. “I would expect that if this package is adopted, we can be fully operational again next year.”
Meanwhile, there’s another busy week of earnings on deck with 78 S&P 500 components set to report quarterly results. Among the names on deck are Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola and Disney.
As for the coronavirus, more contagious variants continue to spread across the US. On Friday, Virginia health officials reported the first state case of the tribe first identified in South Africa. On Sunday, South Africa stopped distributing AstraZeneca’s vaccine due to minimal efficacy against the strain first identified in the country.
In the US, the introduction of vaccines continues. “Boots on the ground are becoming more efficient at distributing the vaccine, and positive research data has bolstered hopes that a third vaccine may soon be available for emergencies,” said Ryan Detrick, chief market strategist for LPL Financial. “It is clear that as a greater proportion of the population receives their vaccinations, economic activity can pick up and take on hard-hit service jobs again.”
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