Lawmakers Reach $900bn Stimulus Deal As UK Hit By New Coronavirus Strain

On Sunday evening, lawmakers reached a deal on a near $900bn stimulus package to help sustain the US economy as the pandemic continues to ravage the country. Recent economic data has highlighted an urgent need for stimulus, with weak retail sales figures and increasing jobless claim figures, demonstrating the fragility of the US economic recovery. The package includes an extension of the paycheck protection programme, funding to aid Covid-19 vaccine distribution, and $600 payments to American adults. 

At the US open today Tesla’s (TSLA) inclusion in the S&P 500 will be officially complete, with the electric car maker becoming the fifth-largest company in the index market cap-wise. Ahead of the addition, Tesla stock jumped 6% on Friday, with trading volume running at more than four times the daily average, however out of hours trading is indicating it is currently down 5%.

Closer to home, the UK is still reeling from the coronavirus lockdowns imposed across London and the South East on Saturday after a new, mutated version of the virus was flagged. A number of EU countries - including Germany, France and Ireland - have now halted travel with the UK, while millions of peoples’ plans for Christmas have been affected.

Brexit talks continue this week between the UK and EU, with the deadline for the UK to exit the EU now just ten days away.

Tech stocks, small caps outperform

All three major US stock indices were in the green last week, with the Nasdaq Composite out in front with a 3.1% gain. Technology shares and small-cap stocks outperformed during the week; the S&P 500’s information technology sector up 3.3%, and the Russell 2000 index up 3.1%. Apple (AAPL) was one force driving the major indices higher, as the $2.2trn market cap giant added 3.5% during the week, taking its one-month gain to 8%. Energy shares had a tough week, with the S&P 500’s energy sector sinking 4.2%. Chevron (CVX) fell back 5.7%, tempering its recent gains, although the stock is still up by 11.5% over the past three months. Similarly, Exxon Mobil (XOM) fell 2.4%, with its three-month gain standing at 14.9%.

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