U.S. stock index futures rose early Monday, as the major averages looked to build upon gains following the best week since November amid optimism toward more Covid stimulus.
Futures contracts tied to the Dow Jones Industrial Average rose 120 points, or 0.4%. S&P 500 futures also added 0.4% and Nasdaq 100 futures gained 0.3%.
Treasury Secretary Janet Yellen urged Congress on Sunday to pass President Joe Biden’s stimulus plan, saying if it does the U.S. could return to full employment by 2022.
“There’s absolutely no reason why we should suffer through a long slow recovery,” Yellen said during an interview on CNN’s “State of the Union.” “I would expect that if this package is passed that we would get back to full employment next year.”
The Senate and House each passed a budget resolution on Friday, starting the reconciliation process that would allow Biden’s $1.9 trillion rescue package to get through the Democratic-held Senate with a simple majority. The package includes $1,400 stimulus checks, supplemental jobless benefits and Covid-19 vaccine and testing funds.
Wall Street is coming off a solid week as the market shook off fears of a speculative trading frenzy. The S&P 500 closed at a record high on Friday and gained 4.2% last week. The Dow and the Nasdaq Composite rose 3.6% and 5.4%, respectively, in the prior week. The Russell 2000, meanwhile, is on its longest daily winning streak since May, and gained 7.7% last week for its best weekly performance since June.
“While the economy is likely in a short-term stall as vaccinations roll through the population, it would take an epic unforeseen failure in the rollout of the various vaccines to prevent the domestic and economic engine from ramping greater than most expect,” Tony Dwyer, chief market strategist at Canaccord Genuity, said in a note.
Meanwhile, another busy week of earnings is on deck with 78 S&P 500 components set to report quarterly results. Among the names on deck are Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola and Disney.
On the coronavirus front, more contagious variants continue to spread throughout the U.S. On Friday Virginia health officials reported the state’s first case of the strain first identified in South Africa. On Sunday South Africa halted distribution of AstraZeneca’s vaccine given its minimal efficacy against the strain first identified in the country.
“We are still very much in a bull market at the early stages of an economic recovery that’s gaining momentum,” Michael Wilson, chief U.S. equity strategist at Morgan Stanley, said in a note to clients Sunday. “We continue to recommend stocks with the most upside to an improving economic backdrop as the vaccines are distributed and normal activities resume,” he added.
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