California Lockdown, Impeachment, Chinese Stock Mania – What’s New in the Markets


By Geoffrey Smith – California is set to lift its stay-at-home order, as national infection rates and hospital admissions hit their lowest level in weeks. Donald Trump’s second indictment reaches the Senate, as President Joe Biden is set to continue his America First policy on government procurement. Chinese retail investors blow a bubble and a TikTok rival is planning a $ 5 billion Hong Kong IPO. Here’s what you need to know about the financial markets on Monday, January 25e.

1. California to lift lockdown as number of cases declines

California Governor Gavin Newsom is expected to lift the statewide stay-at-home order, a change that could allow restaurants and gyms in many counties to reopen outdoor dining and services, reported the LA Times and others.

The news comes as the 7-day average of new Covid-19 infections across the country fell to its lowest since early December, while the number of people hospitalized with the virus fell to its lowest in six weeks .

News of the pandemic elsewhere has been less bright: France, which already applies a 12-hour national curfew, could again be locked down later this week, the government confirmed on Monday. The UK is considering further tightening its borders. Mexican President Andres Manuel Lopez Obrador has become the latest world leader to test positive for the virus as Mexico’s death toll from Covid-19 surpassed 150,000.

2. Biden Buy American Order

President Joe Biden is expected to sign a new “Buy American” order, underscoring the essential continuity of US trade policy despite the radical change in tone expected from Donald Trump’s administration.

According to the Wall Street Journal, the policies of the order will include tighter government procurement rules to make it more difficult for federal agencies to purchase imported products and will revise the definition of products made in the United States, thereby increasing the local content requirements.

Biden’s political initiatives will continue to vie for attention as the House of Representatives sends articles of Donald Trump’s second impeachment to the Senate, most likely later on Monday. Some have speculated that the new impeachment trial will make it harder for Biden to get bipartisan approval for his $ 1.9 trillion stimulus package.

3. Stocks should open higher; Dallas and Chicago Fed polls expected

U.S. equity markets are expected to open the week higher due to improved pandemic news flow and confidence in high and sustained liquidity given the loose state of U.S. fiscal and monetary policy. The latter should be reaffirmed on Wednesday after the last policy meeting of the Federal Reserve.

As of 6:30 a.m. ET (11:35 a.m. GMT), were up 8 points, or less than 0.1%, while advancing 0.3% and up 1.0%, supported by the continued craze for actions of semiconductors in particular.

is the only publication of results to note in a silent session that precedes a veritable orgy of updates during the rest of the week. The regional and Fed polls are due at 8:30 a.m. ET and 10:30 a.m. ET, respectively.

4. Bubbles in China

The retail investor craze is alive and well, not just as U.S. stock Tencent Holdings Ltd (HK 🙂 in Hong Kong climbed more than 10% in a move fueled by retail action in the contract market to term and options.

The move had no visible single trigger, but concerns about Beijing’s attitude toward the immensely rich and influential tech giants in China have since abated. Ali Baba (NYSE 🙂 founder Jack Ma reappeared in public for the first time in over two months last week. Tencent (OTC 🙂 stock has now gained 30% in two weeks, adding some $ 230 billion in market capitalization in the process.

The bubble mood was also in effect with the news that short-lived video company Kuaishou Technology has started marketing an IPO that it hopes will bring in $ 5 billion and value the company at over $ 5 billion. $ 60 billion.

5. Oil regains momentum despite Chinese lockdown fears

Crude oil prices have picked up some momentum after the selloff last week. As of 6:40 a.m. ET, U.S. futures were up 0.8% to $ 52.67 per barrel, while futures were up 0.5% to $ 55.55 per barrel.

Fears of a negative impact on Chinese demand continue to dissipate, given the lockdown in various regions (the city of Tonghua, on the North Korean border, has reportedly announced food shortages since its lockdown five days ago) .

Market positioning looks a bit less strained after data showed net long positions in futures fell to their lowest since November.


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