The Biden administration has outlined steps to curb the spread of the COVID-19 omicron variant. The administration's specifics and optimism helped the equity benchmarks to rebound sharply on Thursday. Furthermore, jobless compensation claims remained low last week, reflecting improvement in the labor market. And spending from the infrastructure bill and Build Back Better (if the latter is passed) is expected to boost the overall economy. Given this backdrop, popular ETFs, SPDR S&P 500 ETF (SPY), iShares Russell 2000 ETF (IWM), Energy Select Sector SPDR (XLE (NYSE:XLE)), and Industrial Select Sector SPDR (XLI) might be solid bets. Read on.President Biden laid out a pandemic strategy on Thursday that includes hundreds of vaccination sites, boosters for all adults, new testing requirements for international travelers, and free COVID-19 tests at home in response to the newly identified omicron COVID-19 variant. The benchmark indices rebounded sharply on Thursday. In addition, Bank of America (NYSE:BAC) noted that for the S&P 500 index December has historically been a strong month, with 2.3% average gains since 1936.
The labor market recovery looks promising as unemployment claims remained low last week, indicating that employers are retaining their workers and are hiring more. And the trillion-dollar infrastructure act and proposed Build Back Better spending plan are expected to provide the economy with a considerable stimulus.
New York-based financial analysis firm CFRA Research expects greater room for stocks to soar in December, given the market’s good performance after its October low. Therefore, popular ETFs SPDR S&P 500 ETF Trust (SPY), iShares Russell 2000 ETF (IWM), Energy Select Sector SPDR Fund (XLE), and Industrial Select Sector SPDR Fund (XLI) could be solid investments now.