The S&P 500 futures trade 40 points, or 1.1%, above fair value and trade near record territory after a brief pause yesterday.
Investors remain sanguine about the startling number of new coronavirus cases/hospitalizations in the US. due to the prospects of a widespread vaccine in 2021 and low interest rates that support higher equity valuations. In addition, the large amounts of cash still parked in money market funds has some investors thinking there's still plenty of fuel in this bull market. The vaccine optimism can be seen in shares of Moderna (MRNA 70.40, +17.66, +11.6%), which have gone parabolic on the cusp of receiving emergency use authorization from the FDA for its vaccine, and in shares of Zoom Video (ZM 48.00, -30.36, -6.4%), which are down despite providing positive earnings results and upbeat guidance.
Regarding fiscal support, Fed Chair Powell and Treasury Secretary Mnuchin will testify before Congress on the CARES Act, starting at 10:00 a.m. ET. In his prepared remarks, Mr. Powell was more cautious, indicating that the "economic outlook remains 'extraordinarily uncertain' and a recovery will largely depend on the success of efforts to keep the pandemic in check." On the data front, investors will receive the final Markit Manufacturing PMI for November at 9:45 a.m. ET, followed by the ISM Manufacturing Index for November (Briefing.com consensus 58.0%) and Construction Spending for October (Briefing.com consensus 0.7%) at 10:00 a.m. ET. Auto and truck sales for November will be released throughout the day.
U.S. Treasuries have edged lower, pushing yields slightly higher. The 2-yr yield is up one basis point to 0.15%, and the 10-yr yield is up two basis points to 0.86%. The U.S. Dollar Index is down 0.1% to 91.81. WTI crude futures are down 0.4% to $45.18/bbl.
In U.S. Corporate news:
Zoom Video (ZM 448.00, -30.36): -6.4% despite beating top and bottom-line estimates and guiding JanQ EPS and revenue above consensus.
Moderna (MRNA 170.40, +17.66): +11.6% in a momentum trade following yesterday's 20% gain attributed to encouraging vaccine news.
Charles Schwab (SCHW 50.17, +1.39): +2.9% after the stock was upgraded to Overweight from Equal Weight at Wells Fargo