Looking Back, Looking Forward – Sunday, Feb. 7

Chart, Trading, Courses, Forex, Analysis

The S&P 500 ended the week at a new closing high. S&P 500 members are on their way to show year-over-year EPS growth after a gap of three quarters. President Biden and the Democrats moved to fast track the $1.9 trillion relief plan without Republican support. Prospects of this stimulus helped investors to take a subpar January jobs report in stride. Vaccine administration has picked up.

Fears of speculative excesses triggered last week by Reddit group-led squeeze of the most shorted stocks like GameStop (GME) and AMC Entertainment (AMC) vanished quickly as such stocks crashed.

The parade of impressive fourth-quarter earnings reports continued meanwhile. With S&P 500 members beating analysts’ forecasts by 15% on average, the benchmark’s aggregate earnings are on track to grow year-over-year for the first time since the fourth quarter of 2019.

By a 51-to-50 vote, the Senate approved a budget resolution that would allow Democrats to fast track President Biden’s $1.9 trillion coronavirus relief plan without Republican support. The package includes $1,400 stimulus checks, a supplemental jobless benefit, and COVID-19 vaccine & testing funds.

Investors looked past a lackluster January jobs report, believing Federal stimulus will continue to heal the economy. The Labor Department reported the U. S. economy added just 49,000 jobs. The unemployment rate fell to 6.3% from 6.7% as millions, unable to find work, dropped out of the labor force. Nearly 10 million jobs that vanished in the early stages of the pandemic have not returned.

Vaccine administration gained momentum last week. The cumulative number of COVID-19 vaccination doses administered rose by nearly 9 million to 36.8 million. Concurrently, the nationwide total of COVID-19 hospitalizations fell, ending the week at 86,300 from 101,000 the week before.

For the week ending February 5, the S&P 500 (SPY) rose 4.8%.

All of the 11 sectors gained.

Sector returns for the week ending February 05, 2021

Leaders and laggards for the week ending February 5. 2021

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