US stock markets appear to be rediscovering some form ahead of Joe Biden’s inauguration on Wednesday, opening strongly after a decent performance a day earlier.
The incoming administration is looking to hit the ground running and has some very ambitious plans to combat the pandemic and the economic damage it has inflicted. Janet Yellen was very clear about the need to “act big” now rather than focusing on debt, with the cost of borrowing at record lows.
The challenge for Biden and his team will be getting their ambitious plans through Congress where they have extremely slim majorities. Biden has repeatedly said he wants to bring the country back together and he’ll have to start on Capitol Hill. Still, investors welcomed Yellen’s comments, ahead of her expected confirmation as Treasury Secretary this week.
Earnings season will increasingly become the focus now, with the coming year bringing its own challenges, as we’re already seeing. The first quarter was always going to be very challenging for many businesses but it has been complicated further by the need for stricter restrictions as a result of new more aggressive variants of Covid-19.
The outlook is vastly improved though by the vaccine rollout which we’ve already seen reflected in some of the results so far and we may see more of it in the coming weeks. Obviously, there are some companies that have prospered in the last 12 months which will be hoping to build on that this year, Netflix being a prime example of this.
The company opened more than 12% higher today after reporting knockout results after the close on Tuesday and revealing it will soon no longer be reliant on external financing and may even return cash to shareholders. Tech stocks have been given a big lift today, with the Nasdaq outperforming on the open.
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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