U.S. markets and stock exchange traded funds managed to eke out modest gains Tuesday, extending their six-day consecutive streak of gains toward record highs.
On Tuesday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 0.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.1%, and iShares Core S&P 500 ETF (NYSEArca: IVV) was flat.
“Very small downsized moves are a symptom of low volatility,” Trevor Greetham, head of multiasset at U.K. investment firm Royal London Asset Management, told the Wall Street Journal. “Low and falling volatility is a bull market phenomenon. You do get quiet days.”
Michael James, managing director of equity trading at Wedbush Securities, argued that investors are focused on the number of COVID-19 cases declining and expectations of a stimulus package that will be approved in Congress, Reuters reports.
“You’re not seeing money coming out of the market and going into cash,” James told Reuters. “You’re seeing money coming out of one sector and being rotated into another sector to maintain an overall long bias.”
Furthermore, the upbeat corporate earnings season, coupled with monetary and fiscal support, helped lift major U.S. stock benchmarks to record highs.
“The backdrop is largely positive for stocks and I’m not sure there could be a better backdrop for risk assets in the near to intermediate term,” William Herrmann, co-founder and managing partner at Wilshire Phoenix, told Reuters.
However, some analysts caution against piling on as risks from new coronavirus variants that may be resistant to vaccines and any slowdowns in vaccine rollouts could impede an economic recovery that relies solely on putting the coronavirus pandemic behind it.
Many are looking forward to the next coronavirus stimulus installment after the latest economic data revealed a slowdown in jobs growth in the labor market.
Meanwhile, Democrats in the U.S. Senate continue to work on a way to incorporate a minimum wage increase to the comprehensive COVID-19 relief bill they plan to push through in the coming weeks, according to Senate Majority Leader Chuck Schumer.
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