(Bloomberg) — U.S. stock futures edged higher, adding to an advance that left the S&P 500 on the brink of a record high, a day after President Donald Trump moved to extend special unemployment benefits even as the fate of further stimulus remained in doubt.
September contracts on the S&P 500 were up 0.3% as of 2:40 p.m. in Tokyo. The index closed Friday about 1% away from its all-time high reached in February. Futures on the Nasdaq 100 were little changed.
The modest moves suggest “that the market doesn’t view the president’s executive action as the solution to cushioning the economy,” said Quincy Krosby, chief market strategist for Prudential Financial. “Expectations are that both sides of the aisle will continue the wrangling that have become associated with negotiations surrounding fiscal help.”
Rallies in five of the last six weeks have lifted the benchmark gauge for American equities almost 50% above the low it reached on March 23 during the coronavirus panic. While gains exceeding 60% in consumer discretionary, technology and commodity companies have led the advance, every major industry in the index has participated. The rebound has been aided by trillions of dollars in government and Federal Reserve stimulus, huge jumps in companies perceived as benefiting from the stay-at-home economy, and increased buying by individual investors.
“Positive momentum begets positive momentum, and that’s all we’re experiencing right now,” said Phil Toews, chief executive officer of asset manager Toews Corp. “It’s the stance of the Fed, it’s the fact we are in a trend and there’s positive momentum and there’s nowhere else to invest.”
Equity markets have stayed buoyant despite the worst economic data in a generation. While Friday’s U.S. jobless report was slightly better than analysts had forecast, the unemployment rate remains above 10%.
On Sunday, economists at Goldman Sachs Group Inc. revised higher their estimates for the U.S. economy in 2021 on the back of stronger consumer spending but left forecasts unchanged for this year. They expect U.S. GDP growth of 6.2% on an annualized basis versus a previous projection of 5.6%. The team, led by chief U.S. economist Jan Hatzius see the unemployment rate declining to 6.5% by the end of 2021.
Trump announced four executive actions on Saturday, including a temporary payroll tax deferral for some workers and continued expanded unemployment benefits, as the coronavirus pandemic continues to hobble the U.S. economy.
(Updates with pricing in first, second and third paragraphs)
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