S&P 500 Nears New Record High Amid Coronavirus Vaccine Optimism

TOPLINE

The market finished higher on Wednesday—with the S&P closing in on a new record high—after President Trump announced that the U.S. government will purchase 100 million doses of Moderna’s experimental coronavirus vaccine.

KEY FACTS

Crucial quote

“While markets think a fiscal deal will eventually be reached, this isn’t a critical, make-or-break catalyst for stocks (at least in the near-term),” says Vital Knowledge founder Adam Crisafulli. Solid economic data, strong earnings, and anticipation for the Federal Reserve’s meeting next month are all helping the S&P 500 “to absorb Washington’s acrimony.”

Tangent

Former Vice President Joe Biden announced late on Tuesday that he is tapping former Democratic primary opponent Sen. Kamala Harris (D-Calif.) as his vice presidential nominee, ending months of speculation surrounding the first ever female-exclusive VP selection process. Biden’s selection of Harris “wasn’t particularly surprising to the market as she was already considered one of the leading contenders,” Bespoke Investment Group said in a recent note.

What to watch for

Ongoing coronavirus stimulus talks, which ended in a stalemate last week. President Trump last Saturday issued several executive orders to extend economic relief programs, such as expanding federal unemployment benefits—at a reduced rate of $400 per week, deferring student loan payments through 2020, extending a federal moratorium on evictions and providing a payroll tax holiday. But Trump’s executive action was met with criticism from both parties and is likely to face legal challenges, since continuing the programs would require federal funding from Congress. Treasury Secretary Steven Mnuchin said on Monday that the White House is open to resuming coronavirus relief talks with Democrats and is willing to provide more relief money in order to make a compromise.

Further reading

Stocks Turn Negative After Russia Claims To Have World’s First Coronavirus Vaccine (Forbes)

Goldman Predicts ‘At Least One’ Vaccine Approval Before The End Of 2020, Raises GDP Estimate (Forbes)

U.S. To Buy 100 Million Doses Of Moderna Coronavirus Vaccine (Forbes)

Dow Jumps 350 Points After Trump Signs Executive Orders To Extend Coronavirus Relief (Forbes)

Slashing $600 Unemployment Benefits Would Be ‘Absolutely Devastating’ For U.S. Economy (Forbes)

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