Yesterday President-elect Joe Biden finally revealed his first stimulus plan to target the coronavirus pandemic in the United States. Biden will be asking for $1.9 trillion in funding, which needs to be approved by both chambers of Congress.
The money will add $1,400 to the direct payments to households, making them $2,000 in total. It will also funnel billions of dollars into local governments to help with the distribution and administration of Covid-19 vaccines, which so far has been lacking. Trump’s administration is currently only halfway through its vaccination goals, in large part because states don’t have the staff and the funding to vaccinate more people faster.
Though Biden’s stimulus plan is ambitious, it is nothing new compared to investors’ expectations. Thus, the financial markets did not react strongly to his announcements. Biden will speak more in-depth about his vaccination plan today.
US stock indices today are correcting downward after the underwhelming stimulus announcement.
For traders interested in stocks and securities, today it will be worth paying attention to a flood of earnings reports from some of the biggest banks in the United States. The data is expected to be overwhelmingly positive due to the optimism and high risk appetite that dominated the fourth quarter of 2020.
Chinese tech companies will also be in the spotlight today. Trump’s administration blacklisted more Chinese companies today, including smartphone and electronics maker Xiaomi. Keep an eye on the bigger Chinese companies like Tencent and Alibaba, which have evaded blacklisting so far.
Some highlights from the economic calendar include two better than anticipated GDP reports from the United Kingdom. Year-on-year, the UK economy shrank by 8.9%, which is better than the forecast of 12.1%.
The November balance of trade from the eurozone was somewhat disappointing, coming short of the forecast of 26 billion euro.
Later today we expect the December retail sales report and the Michigan consumer sentiment survey from the United States, along with several other publications.
