U.S. Stocks Advance As Biden To Nominate Powell For Second Term
Stocks have shown a strong move to the upside in morning trading on Monday following the mixed performance seen last week. With the upward move, the Nasdaq and the S&P 500 have reached new record intraday highs.
The major averages have pulled back off their best levels in recent trading but currently remain firmly positive. The Dow is up 239.56 points or 0.7 percent at 35,841.54, the Nasdaq is up 112.66 points or 0.7 percent at 16,170.10 and the S&P 500 is up 41.53 points or 0.9 percent at 4,739.49.
The strength on Wall Street comes after President Joe Biden announced his intent to nominate Jerome Powell for a second term as Federal Reserve Chair.
The White House also revealed that Biden intends to nominate current Fed Governor Lael Brainard as Vice Chair of the Federal Reserve System.
“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” Biden said.
He added, “That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery.”
Biden expressed confidence Powell and Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make the economy stronger than ever before.
“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” Biden said.
Powell, who was nominated by former President Donald Trump, took office as Fed Chair in February 2018. His current term was due to end in February 2022.
The positive reaction to the news comes as traders seem relieved Biden decided to stick with the same Fed Chair as the economy grapples with elevated inflation.
The markets may also be benefiting from what is a typically positive time during the Thanksgiving Day holiday week.
“The last five trading days of November are traditionally positive, since 1950,” Sam Stovall, chief investment strategist at CFRA, said, according to CNBC.
He added, “There’s a two-thirds likelihood the market is up on the day before Thanksgiving and a 57% likelihood the day after Thanksgiving, and a 71% likelihood that it’s up on Monday.”
Steel stocks have moved sharply higher in morning trading, resulting in a 3.6 percent spike by the NYSE Arca Steel Index. The index continues to recover after ending last Thursday’s trading at its lowest closing level in almost eight months.
Significant strength has also emerged among banking stocks, as reflected by the 2.2 percent jump by the KBW Bank Index. With the gain, the index is rebounded after dropping to a one-month closing low last Friday.
Oil service stocks are also regaining ground following recent weakness, with the Philadelphia Oil Service Index surging up by 2.3 percent after ending the previous session at its lowest closing level in almost two months.
The rebound by oil service stocks comes as the price of crude oil for January delivery is rising $0.28 to $76.22 a barrel after plunging $2.47 to $75.94 a barrel last Friday.
Telecom, tobacco and transportation stocks are also seeing notable strength, while gold stocks are moving lower along with the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index fell by 0.4 percent.
Meanwhile, the major European markets have shown a lack of direction on the day and are currently all positive. While the U.K.’s FTSE 100 Index is up by 0.5 percent, the French CAC 40 Index is up by 0.3 percent and the German DAX Index is just above the unchanged line.
In the bond market, treasuries are giving back ground after moving notably higher over the three previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.8 basis points at 1.594 percent.
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