Stocks Hit Record Highs As An Extra $1 Trillion In Stimulus May Come “Fairly Soon“
- Date: 09-Jan-2021
- Source: Forbes
- Sector:Financial Markets
- Country:Middle East
Stocks Hit Record Highs As An Extra $1 Trillion In Stimulus May Come “Fairly Soon“
Stock market
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This week, US stock benchmarks broke through record highs as Democrats took control of the Senate. The S&P 500 budged 1.3% for the week. The Dow—1.4%. Nasdaq's
NDAQ
tech stocks popped 3%. Meanwhile, the little ones under the Russell 2000 jumped a strong 6%.
The strongest theme driving stocks (especially small caps) is a spending spree that the “blue wave” is set to unleash. The economy is still like a toddler on a bike with training (ahem, stimulus) wheels. And now that Democrats hold a thin majority in Congress, Wall Street is banking on, well, even sturdier training wheels.
Matthew Luzzetti, chief US economist at Deutsche Bank, thinks an extra $750 billion to $1 trillion in stimulus aid may be in store. Renowned economist David Rosenberg expects a trillion-dollar package from Democrats “fairly soon.” He believes this extra aid may drive GDP growth to 7% this quarter.
Another positive for certain stocks is that a Democrat-led Congress will help Biden push his bold agenda—with a historic $2 trillion climate plan at the forefront. After the “blue sweep” victory, investors