Stocks rose as Yellen advocated for a hefty fiscal relief package
Wall Street stocks rose on Tuesday in anticipation of another big stimulus and a faster pace of vaccine distribution as Janet Yellen in her Senate confirmation hearing called for more fiscal aid for the struggling economy amid the pandemic. Besides, investors were preparing for the inauguration of President-elect Joe Biden and a stream of fourth-quarter earnings. As such, the Dow Jones Industrial Average rose 0.38%, the S&P 500 gained 0.81%, and the Nasdaq Composite advanced 1.53%. As a reminder, US markets were closed on Monday in observance of the Martin Luther King Jr. holiday.
Asian equities were mixed-to-higher, having climbed to a record high on Wednesday as Yellen advocated for a hefty fiscal relief package overnight. She noted that the benefits of a big stimulus package are greater than the expenses of a higher debt burden. Against this backdrop, MSCI’s Asia-Pacific index outside Japan rose nearly 1.0%, reaching its highest level ever. Hong Kong’s Hang Seng rose over 1% to approach its 2019 peak while Australian shares gained 0.6% to reach a record high. Meanwhile, pandemic-related concerns sent Japan’s Nikkei 225 lower.
In Europe, stocks opened marginally higher, reflecting a more positive mood in US futures as investors brace for Biden’s inauguration later in the day. The pan-European Stoxx 600 climbed 0.2% in early trade, with the technology sector leading gains on Wednesday. As for the data, U.K. inflation doubled last month Consumer Price Index climbed to 0.6% in December from 0.3% in November.
Meanwhile, the dollar came back under the selling pressure after US Treasury Secretary nominee Yellen made the case for more stimulus. As a result, EURUSD climbed to the 1.2160 local resistance that triggered a pullback in recent trading. Still, the pair remains in the green on the daily timeframes so far. On the positive side, Italy’s government survived its political crisis but the slow pace of vaccinations in Europe cap gains in the common currency.
