U.S. markets and stock exchange traded funds were higher Friday as hopeful investors looked to recent developments for a coronavirus vaccine, along with improving retail sales data.
On Friday, the Invesco QQQ Trust (NASDAQ: QQQ) fell 0.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.6% and iShares Core S&P 500 ETF (NYSEArca: IVV) rose 0.3%.
Supporting the positive sentiment on Friday, Pfizer Inc announced it could apply for U.S. authorization for the COVID-19 vaccine it is developing with German partner BioNTech as soon as November, Reuters reports.
The positive vaccine updates come as the U.S. and Europe see another wave of Covid-19 infections. More than half a dozen states reported record numbers of new coronavirus cases.
“There are some pretty significant concerns that we’re going to see a ramp-up in infections in the U.S.,” Ronald Temple, head of U.S. equity at Lazard Asset Management, told the Wall Street Journal. “I am worried that could be a headwind between now and year-end.”
Strong retail sales in September also helped lift markets, beating analyst expectations. Additionally, consumer sentiment for the current month surprised on the upside. However, some are concerned that after previous stimulus ended, consumers may begin to tighten their belts again, and the outlook for another fiscal aid package remains uncertain unless Washington can reach an agreement.
“This was a strong showing by the consumer,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters. “Even though we still have high unemployment, the consumer hasn’t changed his spending habits yet.”
As Capitol Hill continues with talks, U.S. Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi that President Donald Trump would “weigh in” with Senate Majority Leader Mitch McConnell if there is an agreement on a new pandemic relief package. House Republican leader Kevin McCarthy, though, warned that an agreement may not be reached ahead of the November 3 election as long as Pelosi is involved.
“Investors are still very much concerned about the uncertainties around the stimulus talks,” Cardillo added. “We could see something before the election but whoever wins the election will probably give us a bigger stimulus package which is desperately needed.”
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