Bulls were enjoying another solid session in the stock market today. After a very powerful rally on Tuesday, the S&P 500 continued higher on Wednesday. However, it closed higher by just 1.2% after a late-session decline. Still, it was the index’s first two-day gain in more than a month, as volatility has hammered the stock market since mid-February.
Investors continue to bid up stocks (or bears continue to cover their shorts) ahead of the stimulus bill announcement. As it stands, the market is expecting about $2 trillion in federal aid, as Congress continues to iron out the wrinkles. Will it lead to a “buy the rumor, sell the news” event?
Also keep in mind the jobless claims numbers will hit on Thursday morning before the open. One would expect the market to be pricing in a poor result, but you never know. It’s worth pointing out ahead of time.
A Deeper Look at the Bill
Reports finally have the $2 trillion stimulus bill pegged down, although it still needs to pass. The plan reportedly calls for people who make up to $75,000 a year to receive $1,200, and for couples who make up to $150,000 to get $2,400, with another $500 per child.
Decreased payments would be for anyone making more than $75,000, with a cap of $99,000 per individual or $198,000 per couple. Those who typically don’t benefit, such as furloughed employees or freelancers, will also receive benefits too.
Further, $100 billion will go toward assisting hospitals and $350 billion to help small businesses. Another $500 billion will be for assisting bigger corporations. Remember, the details are not final, but this is what we’re reportedly working with now.
A number of stocks were surging in reaction, including real estate investment trusts, Square (NYSE:SQ) and transport and hospitality stocks. Delta Air Lines (NYSE:DAL) climbed over 15%, Marriott (NYSE:MAR) jumped 7.7% and Royal Caribbean (NYSE:RCL) climbed more than 22%.
Movers in the Stock Market Today
Target (NYSE:TGT) has seen a bump in traffic from people stocking up on everything from food to medicines due to the coronavirus from China. As a result, Target is delaying some of its prior remodel plans, as well as delaying the opening of some of its smaller-format stores as it focuses on the current environment.
Shares dipped 9.6% on the day. That’s despite management saying that same-store sales are about 20% year-over-year higher so far for March. The company is seeing a 50% same-store increase in food, beverage and essentials, but a 20% same-store decrease in apparel and accessories. Still, Target is pulling guidance and suspending share repurchases as the environment has too much uncertainty.
Also struggling to nail down the impact from the coronavirus is McDonald’s (NYSE:MCD). The company currently has all Italy, France, Spain and United Kingdom locations closed due to the coronavirus pandemic. McDonald’s is worried about a material impact from the situation. Thankfully though, 95% of the restaurants in China are operating, while most are up and running in Japan.
McDonald’s will give an update in its next earnings call.
Boeing (NYSE:BA), which soared on the day, up 24.3%, hopes to restart production of the currently grounded 737 Max by May. This date is dependent on several moving parts, including how much the coronavirus continues to spread and affect some suppliers. Boeing also has to wait for regulators to clear the 737 Max to return to service.
Boeing and the S&P 500 ETF were two of our Top Stock Trades on Wednesday as well.