The U.S. stock index futures traded higher overnight on Sunday as major averages sought to accelerate gains after the best week since November.
Forward contracts linked to the Dow scored 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, presenting its fifth positive session for the first time since August. The Dow is also on its longest daily winning streak since August, while the Nasdaq Composite recorded its fourth positive session in five on Friday. The technology index also closed at a record high.
“We are still very much engaged in a bull market in the early stages of an economic recovery that is gaining momentum,” Michael Wilson, chief U.S. stock strategist at Morgan Stanley, said in a note to clients on Sunday. “We recommend recommending stocks with the most upside down to improve the economic background as the vaccines are distributed and normal activities resume,” he added.
All three of the big averages ended the week in the green, and each posted its best week since November, as fears of the short-term pressure of a handful of stocks that led to broader market contagion fell. The Russell 2000, meanwhile, is on its longest daily winning streak since May and rose 7.7% last week for its best weekly performance since June.
“Shares remain higher and are likely to tune in at 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 slope should continue to attract quick money, but the long-term, patient money will be kept on the sidelines until a setback develops,” he added.
The Senate and House each passed a budget resolution on Friday that began the reconciliation process that allowed President Joe Biden’s $ 1.9 billion bailout package by the Democratic Senate by a simple majority.
The package includes $ 1400 stimulus tests, supplemental unemployment benefits and Covid-19 vaccine and test funds.
Treasury Secretary Janet Yellen said Sunday that if the Biden’s stimulus plan is passed, the U.S. could return to full service by 2022.
“There is absolutely no reason why we should suffer from a long slow recovery,” Yellen said in an interview with CNN’s State of the Union. “I would expect that if we succeed in this package, we will be back in full service next year.”
Meanwhile, another busy week of earnings is on deck with 78 S&P 500 components reporting quarterly results. Among the names on the deck are Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola and Disney.
On the coronavirus front, more infectious variants are spreading throughout the US. On Friday, health officials in Virginia reported that the state is the first case of the tribe first identified in South Africa. On Sunday, South Africa stopped distributing AstraZeneca’s vaccine, as the minimal efficacy against the strain first identified in the country is minimal.
In the US, the effects of vaccines continue. “Boots on the ground are becoming more effective with the distribution of the vaccine, and positive trial data have boosted hopes that a third vaccine could soon be made available for emergency use,” said Ryan Detrick, chief market strategist at LPL Financial. “It is clear that as a larger proportion of the population receives their vaccinations, economic activities can pick up and the appointment can be resumed in hard work.”
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