Biden Stimulus announcement, Powell speech, jobless claims – What’s new in the markets


By Geoffrey Smith – President-elect Joe Biden will outline details of his plans to support the economy during the pandemic, while Federal Reserve Chairman Jerome Powell may offer a response in a speech later. Weekly jobless claims are expected to increase slightly. Germany’s economy shrank less than feared in 2019 and China’s trade surplus ends Trump’s presidency at an all-time high. The House voted for the second time to impeach Trump on Tuesday, but there won’t be a Senate trial any time soon. OPEC publishes its monthly report on the oil market. Here’s what you need to know about the financial markets on Thursday, January 14e.

1. Biden to detail the stimulus plans; Powell talks later

President-elect Joe Biden will announce details of his additional stimulus plans to support the economy during the pandemic. Biden pledged a sticker price “in the trillions of dollars,” a number that supported stocks and other risky assets last week.

According to various reports, the proposal is expected to contain an increase in recently authorized direct payments of $ 600 to most Americans, an extension of increased unemployment insurance and support for state and local governments. Hints that Biden will be aiming for bipartisan support imply that some elements of the plan could be cut to appease Republican lawmakers.

An increase in stimulus packages will mean higher federal borrowing and push the Federal Reserve to become the biggest buyer of new bonds. Fed Chairman Jerome Powell is scheduled to speak at 12:30 p.m. ET.

2. Unemployment claims due, German GDP shrinks 5%, Chinese trade surplus record

Biden’s announcement will come after what will likely be new evidence of a further weakening of the job market due to the pandemic.

Weekly data at 8:30 a.m. ET (1:30 p.m. GMT) is expected to show an increase to 795,000 in initial jobless claims.

Overnight, data from Destatis showed that the German economy contracted a little less than expected last year, even though it was still the strongest contraction since World War II. Gross domestic product fell 5.0% from 2019, better than the 5.2% expected. Recent German data has all tended to be revised upwards, so the end result for Europe’s largest economy may be better than reported today.

Elsewhere overnight, China’s final trade figures from the Trump presidency gave no indication that four years of trade wars had impacted it. Exports grew 18% on the year, as the country’s trade surplus hit an all-time high of $ 78.2 billion.

3 flat stocks; Tesla recall, Blackrock (NYSE 🙂 profits

U.S. equity markets are expected to open slightly higher, but are expected to remain in modest ranges pending Biden’s announcement (and any reaction from Fed Chairman Powell).

Overnight it hit 1.11%, 1.10% pivoting to be the new support level rather than a resistance level.

At 6:30 a.m., were up 60 points, or 0.2%, while remaining stable and down 0.3%.

Stocks likely to be the center of concern later include Tesla (NASDAQ :), which is being urged by regulators to carry out what would be one of its biggest safety recalls ever. Asset manager Blackrock and Delta Air Lines (NYSE 🙂 are both expected to report fourth quarter results.

4. Trump impeached, once again; no trial before inauguration

The House of Representatives voted for the second time to impeach President Donald Trump (who now accounts for half of all impeachment votes since the constitution was drafted).

Ten Republican lawmakers voted for the motion, while four others abstained. The vast majority of GOP lawmakers opposed it, pointing to the grip Trump’s electoral base still has over the party.

Outgoing Senate Majority Leader Mitch McConnell has said Trump will not be tried in the Upper House until after Joe Biden is inaugurated.

5. OPEC monthly report due; crude consolidates

The Organization of the Petroleum Exporting Countries will release its monthly report on the outlook for the world crude oil market around 7:20 a.m. ET, according to newswire reports.

The report will present OPEC’s first assessment of demand trends for this year since Saudi Arabia’s surprise decision last week to unilaterally cut production by 1 million barrels per day for the next two months.

Crude prices have hit a succession of post-pandemic highs since then, aided by two reports this week showing a sharp drop in inventories, and consolidating near those highs overnight. U.S. crude futures fell 0.1% to $ 52.84 per barrel, while futures fell 0.3% to $ 55.91 per barrel.


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