S&P 500 rally continues at 3,690 as hopes for US fiscal stimulus grow.

• The S&P 500 has rebounded further in recent trading to around the 3,690 level as hopes for fiscal aid from the government grow.
• Currently, the index is trading with gains of around 0.7%.

The S&P 500 Index it is trading at intraday all-time highs above 3,690 on the last trading day of the week, as traders expect a test of 3,700 in the near future. That means the index is up around 24 points or 0.7% on the day.

Optimism grows on fiscal stimulus, plus good news on vaccines

Some bullish headlines are contributing to hopes that the United States Congress can forge a deal on coronavirus economic aid and avoid a government shutdown on December 11. The Speaker of the US House of Representatives, Pelosi, told the media that she and McConnell had spoken about linking any Covid-19 aid package to a bill that would keep the government open, but noted that it is not yet. a closed deal and that the problems remain unsolved. Meanwhile, Fox News reported that Senate Republicans appear to be open to the $ 908 billion stimulus plan put forward by the bipartisan group of senators.

Elsewhere, seemingly at odds with reports at the end of Thursday’s US session that triggered a short-lived slide in US equity markets, Pfizer and BioNTech have reportedly already made the most of it. of their 2020 vaccine doses and are on track to meet their 2020 targets. Reports on Thursday claimed they would lose their production target by half in 2020. Meanwhile, the duo reiterated their confidence that they will be able to deliver 1.3 billion doses by the end of 2021.

Bad data is good data

Bad data is good data again, apparently. The November report on the US labor market was softer than expected, with the US economy adding only 245 thousand jobs (469 thousand gains were expected) and although the unemployment rate fell 0.2% at 6.9%, this was driven by a 0.2% drop in the participation rate to just 61.5%, still almost 2% below pre-pandemic levels.

But this did not affect US stock market sentiment and instead appears to have given the rally more tailwind as soft data 1) is likely to put pressure on the US Congress. to deliver new stimulus before the Biden administration takes office in January and 2) pressure the Fed to deliver more stimulus later in the month by adjusting the targeting, composition, or even size of its QE.