[뉴욕증시 마감] “Let’s go big”… Mayor’cheers’ when Yelan announces’big stimulus plan’

On the 19th (local time), the New York stock market rose. When US Treasury Secretary Janet Yellen revealed his willingness to boost the economy through active fiscal expenditure at the Senate Financial Committee approval hearing, investor sentiment over risky assets was strengthened.

On the New York Stock Exchange (NYSE), the Dow index closed the trade at 3930.52, up 116.26p (0.38%) from the battlefield. The S&P 500 index rose 30.66p (0.81%) to 3798.91. The Nasdaq Index jumped 198.68p (1.53%) and ended the market at 1,2998.50.

In the face of the desperate situation of the Corona 19 pandemic (a global pandemic) crisis, attention was drawn before the hearing over what kind of blueprints Ylan, who was approved as the finance minister, will come up with the deteriorating US economy. The market has high expectations for the US economy, led by nominee Yellen, a typical Keynesian advocate of active fiscal spending.

It was as expected. Nominee Yellen affirmed the view that it is time to support more broadly than to worry about the fiscal deficit in order to restore the quiescent economy. “If we don’t take a step further, we must be prepared for a longer and more painful recession that will leave long-term scars in the economy in the future,” he said. “We must act more boldly.” As a’pigeon wave’ who prefers an easing policy, it showed an active will to recover the economy.

In addition, Nominee Yellen argued that insufficient use of stimulus would be more financially negative in the long run. Earlier, Biden-elect expressed a positive view regarding the disclosure of an additional stimulus plan worth $1.9 trillion (about 2100 trillion won).

However, a line was drawn about the discussion on tax increases. Nominee Yellen stressed that some of the Donald Trump administration’s tax cuts on large corporations and high-income people may need to be reduced, but now it is time to focus on responding to the pandemic. However, the president-elect Biden said he was not in a position to reverse all of the previous government’s tax cut policies.

After Yellon’s remarks, the stock index’s rise has increased, led by NASDAQ. Expectations for economic stimulus and ease of tax burden on large technology companies have had a positive effect. Major tech stocks rose last week, making up for losses. Facebook and Alphabet jumped 3.87% and 3.29%, respectively. Microsoft (MS) also climbed 1.78% in the afternoon market.

“Yelon holds the key to unprecedented fiscal spending,” said Ludovic Subran, chief economist at Allianz. “Like when he was chairman of the Federal Reserve (Fed), what we see as a pragmatic point of view in responding to the crisis is “It will reassure people.”

In addition, the stock market was supported by the fact that the growth rate of China’s gross domestic product (GDP) in the fourth quarter, announced the day before, exceeded market expectations at 6.5% compared to the same period last year. Last year, China’s quarterly economic growth rate steadily rose to 3.2% in the second quarter, 4.9% in the third quarter, and 6.5% in the fourth quarter after falling to -6.8%, the worst in history in the first quarter due to the Corona 19 shock. Although it was greatly deteriorated in the aftermath of Corona 19, it recovered by drawing a V-shaped curve when the spread was caught. Accordingly, it stimulated expectations that the economy could recover quickly if the pandemic was controlled.

Across the Atlantic Ocean, major European markets fell all at once. The French CAC40 index fell 0.33% to 5598.61, and the German DAX index fell 0.24% to 13,815.06, respectively. The UK FTSE index closed at 6712.95, down 0.11%. The pan-European index, the Stokes 50 Index, also ended trading at 3595.42, down 0.20%.

International oil prices rebounded sharply. Ahead of the inauguration of the U.S. president, the optimism that President-elect Joe Biden’s stimulus package would promote global economic growth had a positive impact.

Western Texas crude oil (WTI) for February delivery on the New York Commercial Exchange (NYMEX) closed at $52.98 per barrel, up 1.18%. March Brent crude on the London ICE futures exchange rose 1.1% per barrel to $52.98.

The gold price also rose. On the New York Merchandise Exchange, delivery for February was traded at $1840.20, up 0.6% per ounce from the previous trading day.