As economic data continues to point to a stalling recovery, U.S. stocks–and the world’s first cryptocurrency–are once again hitting record highs on Wednesday in anticipation of another round of fiscal stimulus finally making its way through Washington.
After a day of new records or near highs for all of the major indexes, the Dow Jones Industrial Average and S&P 500 futures edged up 0.2% on Wednesday morning shortly before the open, while the tech-heavy Nasdaq, after closing at an all-time peak, ticked up 0.1%.
As lockdowns intensified in hotspots around the nation, retail sales fell a greater-than-expected 1.1% in November, dipping for the second month in a row, according to the U.S. Census Bureau on Wednesday; food services and drinking places took the brunt of the fall, plunging 17.2% year over year.
Shares of Chili’s parent Brinker Internationaland Southwest Airlines are down 1% and 5%, respectively, after each firm indicated in regulatory filings that the recent spike in Covid-19 cases has already had a worse-than-projected impact on business.
Heading up gains in the market, shares of Twitter climbed 5%, reaching a more than six-year high, after the firm said Tuesday it was shuttering its money-losing Periscope social streaming platform.
Bitcoin, the world’s first and largest cryptocurrency, shot past $20,000 for the first time on Wednesday morning, bucking recent volatility to hit a new all-time high as the U.S. dollar (at a two-year low) continues to slip amid inflation worries.
Global markets also edged higher on Wednesday, with Hong Kong’s Hang Seng Index ending the day up 0.9%, while the United Kingdom’s FTSE 100 and Germany’s DAX Index added 0.6% and 1.3%, respectively, as of U.S. market open.
“A dearth of negative risk catalysts and guarded optimism vis-à-vis Brexit negotiations and U.S. stimulus talks fostered domestic equity gains that saw S&P 500 close within earshot of last week’s all-time high,” Morgan Stanley equity strategists said in a note Wednesday morning, pointing to the latest stimulus negotiations as a catalyst for stocks late Tuesday. “With the Electoral College vote in the rearview mirror and markets awaiting signs of further progress in fiscal aid negotiations, stock futures opened marginally higher, with Treasury yields virtually unchanged to begin overnight trading.”
A few stimulus plans are on the table, and one $900 billion compromise gained traction overnight, as lawmakers look to pass relief and a $1.4 trillion spending bill before this weekend. Lawmakers have been unable to agree on key issues, such as federal relief for state and local governments, but the first face-to-face meetings in months seem to be yielding compromise, and Wall Street experts note that the market is pricing in some form of relief, totaling roughly $750 billion, could likely be passed before year’s end.
The price of bitcoin has shot up 440% from lows in March. “Unlike previous surges, this time around, a major price driver seems to be fueled by the flow of institutional investors, who are steadily increasing their exposure to Bitcoin and other cryptocurrencies,” notes Nigel Green, the CEO of $12 billion advisory deVere Group, adding that emergency Covid-19 relief measures by governments nationwide have reduced the value of traditional currencies like the dollar.
The enforcement arm of the Massachusetts Securities Division is finalizing an administrative complaint against online broker Robinhood, the Wall Street Journal reportedWednesday morning. The popular trading app has exposed investors to “unnecessary trading risks” by “falling far short of the fiduciary standard,” Massachusetts alleged in a draft complaint reviewed by WSJ and expected to be filed later Wednesday.