U.S. markets and stock exchange traded funds meandered between losses and gains on Thursday as traders waited on progress in the next stimulus package to help support a flagging economic recovery.
On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 0.4%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was down 0.2%, and iShares Core S&P 500 ETF (NYSEArca: IVV) gained 0.1%.
The number of Americans filing for new applications of unemployment benefits remained elevated at 793,000 last week, but dropped lower than the 812,000 in the previous week, Reuters reports.
The weak economic data has helped support bets that the Federal Reserve and the U.S. government will continue to support growth. Federal Reserve Chairman Jerome Powell on Wednesday confirmed that interest rates will remain low to spur the economy and jobs growth.
“As long as the economic news is difficult the Fed is going to continue to act, which will prop up the stock market,” Sandy Villere, portfolio manager at Villere & Co, told Reuters.
Major equity benchmarks have touched record highs recently on hopes that the government will roll out President Joe Biden’s $1.9 trillion coronavirus relief package to help give the economy a hand.
“There is still obviously a significant number of jobs that have been lost, and there is clearly a need for more fiscal support,” Shoqat Bunglawala, head of multiasset solutions, international, at Goldman Sachs Asset Management, told the Wall Street Journal.
Furthermore, a largely better-than-expected earnings season also supported the risk-on sentiment.
“There is room for the market to take a breather but usually there is some sort of catalyst that gets that going,” Tom Martin, senior portfolio manager at Globalt Investments, told Reuters. “And right now the news isn’t providing you that – fiscal stimulus, monetary stimulus, coronavirus information and earnings are all pretty positive.”
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