(New York = Yonhap News) Correspondent Oh Jin-woo of Yonhap Infomax = This week (8-12th), the New York Stock Market is expected to fluctuate while keen on the progress of the introduction of new stimulus measures in the United States.
Jerome Powell, chairman of the Federal Reserve System (Fed), is scheduled to speak. Major companies’ performance announcements are also followed.
As the anxiety triggered by excessive volatility in some stocks, such as gamestop, was resolved, investors’ interest returned to factors such as stimulus measures and economic indicators.
America’s stimulus package is accelerating.
President Joe Biden repeatedly urged the rush of a $1.9 trillion stimulus package. Accordingly, the Democratic Party is pushing for a stimulus plan based on its power that has occupied both the Senate and the House of Representatives.
Last week, the Senate and House of Representatives passed a budget resolution. This is a measure that allows Congress to establish a stimulus bill using the right to adjust the budget, which only requires a majority consent. It is a way to introduce large-scale stimulus measures without the consent of the Republican Party.
House Speaker Nancy Pelosi said his goal is to pass a stimulus bill in the Senate within two weeks.
From this week, the Democratic Party is planning to start preparing specific legislation including regulations on the target of cash payments. It is time for the market’s attention to focus on news about the progress of the bill or negotiations with the Republican Party.
Although the scale and content may be adjusted somewhat, it is expected to support the risk investment sentiment as large-scale stimulus measures can eventually come out.
However, it is a variable that the Senate will begin the impeachment proceedings against former President Donald Trump on the 9th. The impeachment controversy itself will have little effect on the stock market, but the deepening of the congressional conflict can be a burden.
Chairman Powell will give a lecture at the New York Business Club’s online seminar on the 10th.
At the beginning of the year, controversy over the Fed’s early tapering (reduction of bond purchases) arose, but after Chairman Powell drew a line that it was not the time to discuss an exit, it fell below the surface. Some Fed officials who mentioned the possibility of taper this year have also recently retreated.
As Chairman Powell pays extreme attention to remarks that may arouse market anxiety, he is likely to continue with the existing dove (preferring monetary easing) position.
The question is whether Chairman Powell will suggest the possibility of further easing. If you’re lukewarm about the extra stimulus, the market may be somewhat disappointed.
Companies’ performance announcements are also followed. More than 80% of the companies, including the Standard & Poor’s (S&P) 500, who reported their earnings up to last week, exceeded market expectations and recorded net profits.
The market’s expectations for this year’s net profit are also being revised up in line with the sound report card. This could provide a driving force for the stock market to remain strong.
This week, Cisco, Twitter, Uber, and Coca-Cola are scheduled to announce their earnings.
While there are not many economic indicators, the Consumer Price Index (CPI) for January is expected to draw attention.
If the inflation rate rises, the recent rise in U.S. Treasury yields could be steeper.
Although the recent rate hike has been large, it has not acted as a negative factor for the stock market as it is considered to reflect the prospect of introducing stimulus measures and the expectation of economic recovery.
However, rising interest rates can increase the valuation burden, centered on high-value technology stocks, as shown earlier this year. Nor can we rule out the possibility of rekindling the Fed’s tightening debate.
In addition, the situation of the new coronavirus infection (Corona 19) in the United States, which is a trend that has recently calmed down, and the speed of vaccine distribution are still variables to be noted.
If the spread of Corona 19 continues to soften, expectations are raised that the economy is nearing normalization with the supply of vaccines.
Last week, the New York stock market rose sharply on expectations of stimulus measures and easing concerns over volatility in some stocks, including game stops.
The Dow Jones 30 Industrial Average rose by about 3.9%. The S&P 500 soared about 4.7% and the NASDAQ 6%.
◇Main presentations and speeches this week
Inflation is key this week.
On the 8th, the January employment trend index is released. Cleveland Yeon-eun, Loretta Mester, will speak.
On the 9th, the December job offer and turnover report comes out. St. Louis Yann’s speech is scheduled for President James Bourd. Twitter, Cisco, and Rift will announce the results.
On the 10th, the January CPI and December wholesale inventory are announced. Chairman Powell speaks. Uber, Coca-Cola, and GM are showing results.
On the 11th, the number of weekly unemployment insurance claims comes out. Disney and AstraZeneca reveal their results.
On the 12th, the preliminary value of the Michigan Consumer Attitude Index for February is released. New York Yeon Eun-eun’s speech by John Williams was scheduled.
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2021/02/07 07:00 sent