The huge $1.9 trillion stimulus proposal remains the key catalyst for the market.
Some Republicans Raise Concerns About The Size Of The Proposed Stimulus Package
S&P 500 futures are swinging between gains and losses in premarket trading as traders wait for more clarity about the fate of Biden’s $1.9 trillion stimulus plan.
On Sunday, Democratic and Republican lawmakers discussed the new coronavirus aid package proposal. While some Republicans agreed that more money was needed to finance the distribution of the vaccine, they were not happy with the size of the new aid package.
Nasdaq Hits Record Close to End Week While Dow, S&P Close Lower
It remains to be seen whether Republicans will continue to push for a limited bill or they will ultimately agree with Biden’s proposal. As stocks are trading near record highs, traders are very sensitive to stimulus news. Any doubts about the future of the new stimulus package may put some pressure on the market although the general bullish trend remains strong.Advertisement
Oil Moves Higher Despite Virus Worries
WTI oil continues to trade near the $52 level as traders ignore coronavirus-related risks and bet on the new U.S. stimulus package.
The recent Baker Hughes Rig Count report indicated that the number of U.S. rigs drilling for oil increased by 2 to 289. This was a ninth increase in a row. Meanwhile, the U.S. domestic oil production remains at the 11 million barrels per day (bpd) level which is comfortable for the market.
If the continued increase in the number of drilling rigs leads to an increase in domestic oil production, WTI oil will find itself under pressure. Meanwhile, oil-related stocks are set to open lower at the beginning of today’s trading session as stock traders continue to take profits after the rally that took place in the first half of this month.
Gold Tests The Key 50 EMA Level At $1870
Gold and silver mining stocks have lost plenty of ground in January as traders and investors put their money into riskier assets. However, traders’ interest may soon return if gold manages to settle above the significant resistance level at the 50 EMA at $1870.
Gold has been testing this level in recent trading sessions but failed to develop sufficient upside momentum. If gold settles above $1870, it will gain additional upside momentum and move towards the psychologically important $1900 level which should provide material support to gold and silver mining stocks.