When the headline hit last night – from a Biden aide – that Biden’s stimulus spendfest was $2 trillion (or some suggested $3 trillion), markets lurched – bond yields spiked, small caps surged, tech tumbled, the dollar rallied, gold dumped, and crypto rebounded further.
By the end of the day session, gold and the dollar had retraced their moves while stocks, bonds, and crypto extended their trend.
Then late on stocks took a brief dive after NYTimes dropped a headline outlining Biden’s $1.9 trillion stimulus plan…
One thing that markets may not like is that contrary to previous expectations that the “stimmy” check will be $2,000, Biden will instead propose additional $1,400 stimulus checks, “topping up the $600 checks that Congress approved in December.”
Which apparently disappointed stocks… Still, the US equity markets massively diverged with Small Caps exploding higher as Big-Tech and the Dow and S&P drifted down, accelerating late on.