$900 Billion COVID Aid and Latest Spending Bill Passing Through Congress
Optimism regarding the latest economic relief package make waves
Markets are starting the shortened trading week with mixed results after initially seeing major U.S. indices lower due to fear of an additional COVID strain but have rebounded in the afternoon as optimism regarding the latest economic relief package made waves.
Congress agree on a $900 billion virus aid deal
Late Sunday, Congress agreed on a $900 billion virus aid deal which will continue pandemic-related federal unemployment program, provide $600 direct payment per individual, and includes $284 billion for an additional Paycheck Protection Program. The bill is set to make its way through a Congressional vote today. Also supporting markets this week was the latest Federal spending bill, which after several extensions was signed at $1.4 trillion through September 2021.
Tesla made its debut on the S&P but saw shares lower over 6% while major banks, such as Chase and Bank of America, saw shares receive a significant boost following news of the latest economic relief bill. Key economic release and earnings remain light this week with Thursday serving as a shortened trading session while Friday markets will remain closed in observance of the Christmas holiday. Until an additional breakout is maintained, our models are projecting SPY to trade in the range of $340-$375. The SPY could be on its way to retest recent highs with continued strong rotation from growth to value stocks. With the market prone to further corrections, the next level of support is set at $350. We encourage all market commentary readers to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Key U.S. Economic Reports/Events This Week
Gross Domestic Product Revision (Q3) – Tuesday
Consumer Price Index (December) – Tuesday
Consumer Sentiment Index (December) – Wednesday
Weekly Jobless Claims (12/19) – Wednesday
Personal Income (November) – Wednesday
Consumer Spending (November) – Wednesday
Core Inflation (November) – Wednesday
New House Sales (November) – Wednesday
Early Market Close (1 PM ET) – Thursday
Christmas Day Holiday (Markets Closed) – Friday
For reference, the S&P 10-Day Forecast is shown below:
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Tuesday Morning Featured Symbol
Our featured symbol for Tuesday is Eastman Chemical Company (EMN). EMN is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.
The stock is trading at $102.58 with a vector of +0.29% at the time of publication.
10-Day Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, EMN. Our featured symbol is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $47.79 per barrel, down 2.67% at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $32.74 at the time of publication. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The price for the Gold Continuous Contract (GC00) is down 0.35% at $1882.30 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $174.9, at the time of publication. Vector signals show +0.03% for today. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The yield on the 10-year Treasury note is up, at 0.916% at the time of publication.
The yield on the 30-year Treasury note is down, at 1.654% at the time of publication.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The CBOE Volatility Index (^VIX) is $22.5 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.