Markets shifted again today with small caps leading the charge higher on news of a huge 2 trillion stimulus deal coming from the incoming Biden administration. Big tech is down on the news with the S&P flat.
More bad news came in from labor market as data showed weekly initial unemployment claims jumped 181,000 to a 4 1/2 month high. Initial unemployment claims also rose 199,000, higher than anticipated. Higher Covid deaths are also taking a back seat to stimulus optimism. Where does this leave us going into a holiday weekend? Probably lower, but this market does NOT like going lower so the small caps continuing higher and the Nasdaq 100 lower (or maybe higher) is not out of the question.
Investors will have to come to grips with a slowing economy in the coming days and weeks and that no matter how much stimulus checks are, free money will only get us so far. The market leaders that drive the economy forward being down is never a good thing.