(DAILY NOTION): Wall Street Celebrates Biden's Inauguration, Climbs to New Highs, Next Mover: Progress of Biden's Stimulus Package

NASDAQ 100 (as of Jan 21, 2021 at 12.20 p.m.)

Source: Yahoo Finance

SPX 500 Futures (as of Jan 21, 2021 at 12.20 p.m.)

Source: Yahoo Finance

US30 Futures (as of Jan 21, 2021 at 12.20 p.m.)

Source: Yahoo Finance 

Wall Street cheered on President Biden on his inauguration day as all three major indices closed at record highs. NAS100 led by the way by gaining 1.97%, followed by the SPX500 that rose 1.36%. Both the NAS100 and SPX500 also achieved intraday all-time highs. The US30 was up by 0.83%, spurred by Netflix-led rally in technology stocks. 

In the broader market, this rally was due to the gains in the consumer goods, services, and technology sectors. The CBOE Volatility Index also reached a new one-month low, as it was down 7.44% to 21.51. The CBOE Volatility Index, also known as the VIX, measures the stock market’s expectation of volatility, based on S&P 500 index options. 

The positive sentiment in the market increased when the new president reemphasized the importance of stimulating the economy. President Biden had earlier unveiled a proposed $1.9 trillion stimulus package to boost the U.S. economy. The sentiment to ‘act big on coronavirus stimulus’ was echoed by Janet Yellen earlier this week. Yellen who is Biden’s nominee for U.S Treasury Secretary was the chairwoman of the U.S. Federal Reserve, from 2014 to 2018.

Interestingly, Tapas Strickland, an economist at National Australia Bank, believes that the market is still taking a sanguine view due to tighter regulatory and tax risks given the narrow Senate majority. 

It is undeniable that the true test of the stimulus package is this: Will it pass through Congress, amidst slim Democratic numbers? More importantly, as the economy continues to be ravaged by the pandemic, the death tolls in the U.S. stands at 407, 328 as of yesterday. Business Insider reported that this is nearly the same number of Americans killed during World War 2. 

Overall, as with all new things, there is a shine that increases positivity. How long before this shine fades, and more importantly: what will be left then?

FOLLOWME User Sentiment (as of Jan 21, 2021 at 12.20 p.m.)

SPX500

Short – 91.02%

Long – 8.98%

NAS100

Short – 79.35%

Long – 20.65%

US30

Short – 74.74%

Long – 25.26%