Stock market news live updates: Stocks rise after jobless claims improve, traders shrug off Trump’s stimulus deal threat

Stocks were mostly higher Wednesday morning, as investors weighed the still-dire pandemic situation against the arrival of more stimulus

Late Tuesday, however, President Donald Trump suggested he might not sign the $900 billion stimulus deal Congress approved earlier this week, demanding in a video on Twitter that Congress “immediately get rid of the wasteful and unnecessary items” from the bill. He also requested that Congress increase the $600 stimulus payments to Americans to at least $2,000

Investors also focused on the lingering threat of COVID-19. The Centers for Disease Prevention and Control said that a recent coronavirus mutation identified in the UK could possibly have begun to spread in the U.S. undetected, though a number of new travel restrictions have recently been put in place on Britain. But much remains unknown about the new strain’s virulence and resistance – or lack thereof – to existing COVID-19 vaccines

States continue to grapple with surges in the virus, with virus-related deaths in New Jersey and Arizona reaching multi-month highs earlier this week, and the populous state of California struggling to contain an ongoing surge. While the vaccine distribution rolls on, businesses and individuals must still contend with the present fall-out from the virus’s spread. The Labor Department released its weekly jobless claims report Wednesday morning, showing another 803,000 individuals filed for first-time unemployment benefits last week, ticking down slightly from last week but holding at a historically elevated level

A bevy of other economic data reports on durable goods orders, inflation, and personal income and spending also came out Wednesday morning. No government economic data will be released Thursday or Friday in observance of Christmas Eve and Christmas

And as the year winds down, investors are beginning to turn their attention to 2021. In the very near-term, traders will be closely eyeing the Georgia Senate runoffs at the beginning of January, given that many believe markets have already priced in a divided government outcome, which could be upended in the event that Democratic lawmakers take control of the chamber

Further out over the course of 2021, many strategists believe the reopening trade, and broadening equity market participation among shares of companies hardest hit by the pandemic, will be a key theme.

“2020 was historically a pretty narrow market. By that I mean very few sectors, and even stocks, performed quite well. And then there was the ‘have-nots’ who really lagged the market,” Matt Peron, director of Janus Henderson Investors, told Yahoo Finance on Tuesday. “So we think that coming into 2021, given the recovery that we expect, you should expect to see that broaden out, and we will see more participation from the broader market”

Jefferies equity strategists are sounding an early alarm on the stock market, as a wave of bullishness overtakes investors

“In almost an exact replay of the end of last year, our risk indicators have begun to flash euphoria with sentiment just a tad too bullish,” strategists led by Sean Darby said in a note Wednesday

Still, “aside from a crowded short position on the dollar, there are few other catalysts for a correction in share prices,” they added. “Indeed earnings are still being revised up, real interest rates are negative and inflation expectations are perky. The U.S. Georgia State elections are the obvious risk”

Jefferies cited a number of indicators as pointing to the euphoria, including the fact that the greatest number of S&P 500 stocks are trading above their 200-day moving averages since 2013, and that 89% of small-cap Russell 2000 stocks are trading above their own respective 200-day moving averages. Similar signs of elevated sentiment are showing up in options markets, the analysts added

Other Wall Street firms including Bank of America and Citi have also recently struck a more cautious tone given increasing indications of euphoria

Source(s): YAHOO FINANCE