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The Market Wrap for December 18: Stimulus Hope Drives Gains

One of the constant themes this year has continued to be the lack of stimulus measures to the economy. This week, traders received some confirmation that the bill could be heading their way. Both Democrat and Republican leaders have started to negotiate a new deal that would boost some of the more popular programs under the COVID-19 efforts. For traders, the potential for a new deal was seen as a welcome sign for both the economy and the market.

Elsewhere, data seemed to support the need for more stimulus. Measures of labor, consumer and industrial health all ticked down this week. Given the critical fourth-quarter holiday spending period, this poor data kept the week’s gains in check. As did corporate earnings. With the earnings season pretty much over, the general theme was better guidance with a huge dose of caution.

Corporate actions managed to boost the markets, however. Merger Monday lived up its name with several high-profile deals being announced. Meanwhile, dividend and buyback activity rose and several positive actions managed to lift traders’ spirits throughout the week.

All in all, stocks managed to move higher despite a few setbacks and increased volatility.

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