S&P 500 futures are gaining some ground in premarket trading as the market looks ready to test new highs.
Traders remain focused on the upcoming Fed Interest Rate Decision and the subsequent commentary which will be released on Wednesday. In addition, the market is evaluating the potential infrastructure plan of U.S. President Joe Biden, which is expected to be financed by raising taxes on companies and wealthy individuals.
While markets are often worried about higher taxes, the major economic stimulus which could come on top of the $1.9 trillion stimulus package seems to be bullish for stocks. However, it should be noted that the plan is still being discussed and that it would need to get sufficient political support.
European Countries Suspend AstraZeneca’s COVID-19 Vaccine
Germany, Italy, France and other European countries have decided to suspend AstraZeneca‘s coronavirus vaccine on fears about serious side effects which include blood clots.
The World Health Organization stated that countries should avoid panic, but the political decision to suspend the vaccine has already been made. The decision to suspend the use of AstraZeneca’s vaccine will further complicate the vaccination program in Europe and may lead to more economic harm.
At this point, the markets do not look worried about additional problems in Europe, but the situation may change quickly in case the temporary suspension turns into a permanent one, and Europe has to search for other vaccines for its mass vaccination program. This scenario will likely put some pressure on global markets.
Retail Sales Declined By 3% In February
The U.S. has just released Retail Sales report for February which indicated that Retail Sales declined by 3% month-over-month compared to analyst consensus which called for a decline of 0.5%.
It should be noted that January’s growth estimate was revised from 5.3% to 7.6% which explains the surprising decrease of Retail Sales in February.
It remains to be seen whether traders will react to the headline number as the new stimulus package is on the way, and it could provide significant support to Retail Sales in the upcoming months.