US stock index futures rose in overnight trading on Sunday as key averages appeared to accelerate gains after the best week since November.
Dow-linked futures contracts rose 99 points, or 0.32%. The S&P 500 futures were up 0.4% while the Nasdaq 100 futures were up 0.5%.
The S&P 500 closed at a record high on Friday, posting its fifth consecutive positive session for the first time since August. The Dow also has its longest daily winning streak since August, while the Nasdaq Composite posted its fourth positive session in five years on Friday. The tech-heavy index also closed at a record high.
“We are still in a bull market in the early stages of an economic recovery that is gaining momentum,” said Michael Wilson, chief US equities strategist at Morgan Stanley, in a statement to clients on Sunday. “We continue to recommend stocks with the biggest uptrend ahead of an improving economic environment as the vaccines are distributed and normal activities resume,” he added.
All three major averages finished the week in the green, each having their best week since November as fears that a handful of stocks could lead to a bottleneck that led to wider market contagion eased. The Russell 2000 is now on its longest daily winning streak since May, up 7.7% last week for its best weekly performance since June.
“Stocks continue to rise and should be around 4,000 for the S&P 500,” said JC O’Hara, chief marketing engineer at MKM Partners. “The trends remain positive … the severity of the spike should continue to attract quick money, but longer term patient money will be on the sidelines until a withdrawal develops,” he added.
The Senate and House of Representatives each passed a budget resolution on Friday that launched the reconciliation process that would allow President Joe Biden’s $ 1.9 trillion bailout to get through the Democratic-led Senate by a simple majority.
The package includes stimulus checks worth $ 1,400, additional unemployment benefits, and Covid-19 vaccination and test funds.
Treasury Secretary Janet Yellen said Sunday that the US could return to full employment by 2022 if Biden’s stimulus plan was passed.
“There’s absolutely no reason why we should have a long, slow recovery,” Yellen said during an interview on CNN’s State of the Union. “I would expect to get full employment again next year when this package is passed.”
Meanwhile, there is another busy week with 78 S&P 500 components on deck set to report quarterly results. Names on deck include Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola, and Disney.
On the coronavirus front, contagious variants continue to spread in the United States. On Friday, Virginia health officials reported the state’s first case in South Africa to be first identified in South Africa. On Sunday, South Africa stopped distributing AstraZeneca’s vaccine due to its minimal effectiveness against the strain first identified in the country.
Vaccine rollout continues in the United States. “Stiefel locally is becoming more and more efficient at distributing the vaccine, and positive trial data has raised hopes that a third emergency vaccine will soon be available,” said Ryan Detrick, chief marketing strategist at LPL Financial. “When more of the population receives their vaccinations, economic activity can pick up and recruitment of highly competitive service occupations can resume.”
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