Week in a Glance: Biden and stimulus, Central banks and lockdown

25 Jan 2021

The past week turned out to be quite eventful with various fundamental events. The main thing, of course, was the inauguration of Biden and the expectations of the markets for the implementation of his plan to help the US economy in the amount of $1.9 trillion. On Tuesday, before the inauguration, the future head of the US Treasury, Jannette Yellen, spoke in Congress and called to “act big”.

Actually, this speech was like a trigger for a change in sentiments in the financial markets, which again switched to the greed mode.
As a result, the US stock market renewed its historical highs. Although the behavior of the cryptocurrency market shows that it is likely that the hour of reckoning is just around the corner. This refers to the departure of Bitcoin, albeit temporary, below 30K, that is, it has lost a quarter of its value. Cryptocurrencies are an extreme form of human greed and an early indicator of sentiments shifts. So, it looks like something is starting to change. The next in line is the US stock market.

Actually, something is changing in the air of the stock markets despite all those highs. The earnings season is going pretty strange. Companies publish generally good, and in some places excellent, financials. But their shares after that tend to fall (with few exceptions like Netflix). Looks like, fewer and fewer people want to buy at prohibitively high prices.

Especially when you consider that the global economy is steadily declining in the first quarter due to lockdowns. Germany and a number of other European countries have decided to extend the lockdown until mid-February.

The past week can be called the week of the Central Banks. The Bank of Japan, the ECB, and the Bank of Turkey left the parameters of their monetary policy unchanged (as the markets expected). As a result we did not see any powerful movements in this regard.