Stock futures rose Tuesday, pointing to a rebound from a troubled week as investors hailed Goldman Sachs with excellent earnings and gave signals of another big stimulus and a faster pace of vaccine distribution.
Futures contracts linked to the Dow Jones Industrial Average rose 200 points, or 0.7%. S&P 500 futures were up 0.8%. Nasdaq 100 futures were up 1%.
Goldman’s shares rose 2.7% in premarket trading after the bank beat expectations for fourth-quarter earnings and sales. The blowout results were based on the strong performance of stock traders and investment bankers.
Bank of America was down more than 1% in the premarket after the bank posted quarterly sales that fell short of expectations. The result, however, was slightly above the estimate.
“We expect investors to review the fourth quarter results and focus on company comments on how the rebound is progressing in 2021,” said David Kostin, head of US equity strategy at Goldman, in a note. “With investors in mind through 2021, politics remains a major driver of corporate earnings.”
Janet Yellen, Joe Biden’s nominee for Treasury Secretary and former Federal Reserve chairman, will appear before the Senate Finance Committee Tuesday. Yellen’s prepared remarks call on the federal government to put in a big incentive to support business.
“Neither the president-elect, nor I are proposing this bailout without appreciating the country’s debt burden. But with interest rates at historic lows, it is smartest to act big right now,” Yellen said in prepared remarks. “I believe the benefits will far outweigh the costs, especially when it comes to helping people who have had problems for a long time.”
Stocks that would benefit most from further stimulus and a faster vaccine roll-out resulted in profits in premarket trading. Norwegian Cruise Line Holdings shares were up 3%. Boeing gained 2.8% in premarket trading. American Airlines gained 2.5% in early trading.
Some tech stocks also rebounded from their losses over the past week.
Stocks are “likely to trend higher again after a healthy consolidation ends,” Fundstrat’s Tom Lee wrote in a note citing an increase in vaccination rates and an eventual rollover in coronavirus cases.
Dr. Rochelle Walensky, Joe Biden’s election to head the Centers for Disease Control and Prevention, said Sunday she was confident the U.S. will have enough vaccine doses to meet the new administration’s goal of 100 million people in 100 days to vaccinate.
The movement in futures comes after stocks fell last week. The S&P 500 lost 1.5% for its first weekly loss in three years, while the Dow and Nasdaq Composite lost 0.9% and 1.5%, respectively, and both had their first negative week in five years.
The market fell slightly last week, despite Biden unveiling its $ 1.9 trillion plan for economic relief as the country tries to deal with the Covid-19 pandemic. Biden is slated to be inaugurated with the National Guard in Washington on Wednesday after security concerns rose following a January 6 riot in the U.S. Capitol.
“We’ll have plenty of global economic data and US earnings reports in the coming week. What matters is whether President Elect Biden’s inauguration on January 20 will be peaceful and whether the Senate Republicans are sending signals of constructive cooperation or a repeat of 2020. ” Julian Emanuel, chief strategist for stocks and derivatives at BTIG, said in a statement to clients on Sunday.
The US stock market closed on Monday in honor of Martin Luther King Jr. Day.
