Following Reddit Volatility, the Market Bounces Back; President Biden Also Contributes
Last week the U.S. stock market rebounded from one of its worst weeks in months. Currently, both the S&P 500 and NASDAQ are nearing all-time highs. Investors are hopeful, the rate of vaccinations continues to increase while the government looks to approve President Biden’s COVID relief plan soon.
Millions of Americans have received COVID vaccines and this number should continue to jump due to Biden’s goal of vaccinating 100 million Americans in his first 100 days. Some states, such as New Jersey, have not been able to rollout vaccines at an ideal pace. However, Johnson & Johnson is currently seeking federal approval for their vaccine, creating an additional source of immunity. Additionally, on Friday, the Senate narrowly passed a budget resolution allowing for the enactment of the President’s $1.9 trillion stimulus package.
Separately, in recent weeks, the market has seen an increase in retail investors. These independent investors can undoubtedly have a huge effect on the market, notably driving up the price of companies such as GameStop and also creating a cryptocurrency bull market. How can we expect the market to react in the near future, as even more Americans gain access to investing?
In another development, the January’s jobs report failed to meet the expected number of jobs added. However, despite this missed mark, the report held that wages rose (albeit slightly. This could be a positive indicator for the market if able to ease concerns of inflation and allow the Federal Reserve to maintain very low interest rates.
Finally, U.S. oil prices finished up at almost 9% this week, largely due to U.S. oil inventories and the Organization of the Petroleum Exporting Countries (OPEC) production numbers both decreasing. Goldman Sachs even said they expect Biden’s presidency to be bullish for oil prices in the short term. They project that we will see oil at $65 per barrel by July of this year.