How stimulus controls boost the purchasing power of stocks? – Community News
Stimulus Check

How stimulus controls boost the purchasing power of stocks?

This is how the current crisis started. In February and March last year, the S&P 500 plunged nearly 34 percent as panicked investors sold stocks. The market began to change course in late March after the Federal Reserve cut interest rates to near zero and resumed programs that pumped money into financial markets.

Big Wall Street investors, comforted by the Fed’s moves, immediately plunged back into the stock market. But next to the whales were minnows.

In March, Google searches for “how to buy stocks” skyrocketed. Account opening with brokerage firms skyrocketed. Small volume stock options trading – a favorite of retail traders – increased. The brokerage industry’s shift, in recent years, to a commission-free trading model developed by Robinhood, the app of choice for young investors, helped the boom. So did social media, allowing millions of people sitting at home to research stock trading ideas, exchange tips and brag about their winnings.

“Throwed my stimmy in the stock market and damn it was a beautiful morning,” wrote Mr. Sanchez, the trumpeter, on Twitter on Monday.

The Treasury Department began handing out the latest round of payments last weekend, and about 85 percent of U.S. households will eventually receive it. The latest round follows payments in April and January, when a total of more than $400 billion was shipped.

For Victoria Brown, a 25-year-old in Wilmington, Del., with a steady government job, the $1,400 incentive check is more of an opportunity than a lifeline. She has already deposited the money into her Robinhood account and plans to use some of it to buy the stock of Zomedica, a pet health company she owns 1,000 shares of.

Ms. Brown said her approach to the stimulus was, “How can we take this $1,400 or the $1,600 last year and do something to make more money off it?”