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20.01.202112:59 Forex Analysis & Reviews: Bailout: US stock markets rise in anticipation of a new stimulus package

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The US stock indexes reported growth after the speech of former Fed Chair Janet Yellen to the Senate Committee at the close of trading on Tuesday. As part of her statement, she expressed support for increased spending on anti-crisis measures.

Exchange Rates 20.01.2021 analysis

Following this, the Dow Jones Industrial Average went up by 0.4% to 3,093.52 points, the S&P 500 rose 0.8% to 3,798.91 points and the Nasdaq Composite jumped by 1.5% to 1.3197.18 points.

Exchange Rates 20.01.2021 analysis

Janet Yellen spoke in support of large-scale fiscal stimulus measures for the American economy during her speech to the Senate Finance Committee. She also expressed concern that the States could face a larger and more protracted recession if Congress does not approve additional support, and called on lawmakers to act decisively. The Senate Finance Committee must approve the nomination of Janet Yellen for the post of Secretary of the Treasury of the United States of America.

It is worth recalling that last Thursday, Joe Biden presented a new package of state support measures with a budget of $ 1.9 trillion. It will provide direct payments to the majority of households, allowances for unemployment benefits, as well as additional funds for vaccination of the population. Biden's inauguration is scheduled for Wednesday and his first important task as President is to coordinate the state support program with Congress. However, the new package of measures may meet with resistance from representatives of the Republican Party, who are concerned about the growing budget deficit.

In addition, the corporate reporting season is actively continuing in the United States. Before the start of Tuesday's trading session, Goldman Sachs and Bank of America published their financial reports.

The shares of the second-largest US bank - Bank of America, reported a 22% decline in quarterly profit, decreasing to 0.7%. The price of Goldman Sachs securities sank by 2.3%, despite the reporting indicators that significantly exceeded forecasts.

Judging by the quarterly results of the leading banks, the economy has taken a confident course to stabilize, and the worst-case scenarios have not been confirmed. Over the past few months, the growth of the markets has triggered a rise in the income of investment banks, in particular Goldman Sachs.

The stock markets also started the current week with an optimistic trend. The hopes associated with the spread of coronavirus vaccines confidently outweighed concerns about an uncontrolled increase in the number of diseases. Meanwhile, America continues to have a high level of COVID-19 infections. On Monday, more than 140 thousand new diseases were registered in the country, more than 1.4 thousand patients died.

In the United States, the securities of leading technology companies jumped, showing a serious drop in the past week. Facebook shares went up by 3.9%, Twitter rose 1.7%, General Motors jumped by 9.7%.

In addition, the shares of companies that may benefit from the adoption of new incentives and large-scale vaccination have also increased in price. Paper Boeing Co has added to the cost of 3.1% and American Airlines Group Inc. by 1.3%.

US oilfield services company Halliburton Co declined 0.9 percent, despite the adjusted fourth-quarter earnings and revenue above analysts' forecasts.

The market value of FedEx Corp sank by 1.2%. The company announced the reduction of more than 5.5 thousand jobs in Europe on the background of the completion of the integration of TNT Express.

Norwegian Cruise Line Holdings lost 0.4% after the company announced that it is extending the suspension of cruises until April 30 this year.

Shares of Laser Technology Developer Coherent went up by 30% on the news of the company's sale of its business to the manufacturer of computer components Lumentum. Meanwhile, Lumentum shares sank 11%.

Shares of Stellantis, which successfully debuted on Tuesday on the stock markets of Milan and Paris, jumped by 2.6%.

The pan-European Stoxx Europe 600 lost 0.2%. The yield on the 10-year US Treasury note sank to 1.092% from 1.097% on Friday.

As for the Asian stock markets, they mostly grew. Hong Kong's Hang Seng gained 2.7%, Japan's Nikkei 225 gained 1.4%, and China's Shanghai Composite fell 0.8%.

Desarrollado por un Irina Maksimova
experto de análisis de InstaForex
© 2007-2024

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