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Profit from the Pros By Kevin Matras Executive Vice President
Small-Cap Russell 2000 Hits Another New All-Time High
Image: Bigstock
Stocks closed mostly lower yesterday, but the small-cap Russell 2000 soared, making another new all-time high and close in the process.
The other indexes remain near their all-time highs and are within striking distance of breaking out to even higher highs.
We have been saying that another stimulus/relief bill was likely coming either by the end of this month or next. And it looks like the new administration will be looking to do just that as they propose a $1.9 trillion dollar package. That is expected to include expanded unemployment, a federal minimum wage hike, a vaccination plan, and direct payment checks of $1,400 (which when added to the $600 checks that went out with the latest bill), would equal the much talked about $2,000 payments that many were vying for in the last bill.
In other news, Weekly Jobless Claims rose by 181,000 to 965K. No surprise given the decline we saw in December's jobs report last week amid the tighter social distancing restrictions imposed on businesses to stop the spread of the virus.
But this is temporary. And at the moment it underscores the need for more stimulus to keep the economy supported until we can broaden the reopening.
Nonetheless, growth projections for Q4 GDP are forecast at 8.7%, which, aside from last quarter's unprecedented 33.4%, would be the highest quarterly growth rate in 31 years. And full year GDP for 2021 is expected to grow at the fastest pace in 38 years.
And with more stimulus, and more action to reopen our economy sooner (which includes vaccinating more people), the growth outlook could soar even more.
And that, of course, is bullish for stocks.
Best,
Kevin Matras
Executive Vice President, Zacks Investment Research
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