The G20 summit took place in Bali, Indonesia, on November 2022…
Election results: what’s next?
Information is not investment advice
This weekend the truth has been revealed. After the intense vote counting last week, we get to know the next President of the United States – Joe Biden. What are his promises and what to expect from the markets next month? Let’s see how the land lies before making any premature actions.
Planned policy changes
That’s not a secret that traders will be closely watching how Mr. Biden will deal with the current coronavirus crisis. The cases are still surging across the country and pharmaceutical companies are still working on the vaccines. After the Republicans’ refusal to increase a fiscal stimulus, Joe Biden’s administration plans to implement a totally different approach. As a result, the markets should be prepared for a larger stimulus. Not as large as $2 or $3 trillion, though, as the Senate may still likely remain under the control of the Republicans, but still bigger than the initially offered one.
This fact is bullish for the stock market.
Joe Biden’s promise to increase taxes on corporations may have a direct impact on the components of S&P500. According to Goldman Sachs, the hike of corporate taxes may reduce the earnings of the S&P500 index from $188 per share to $171. After that, a decline of the major American index will be inevitable.
However, without a Democratic Senate, there is a little chance that this policy change will pass through. Investors understand that and expect the stock market at new highs.
If the Senate is controlled by the Republican Party, this fact is neutral for the stock market.
3. Tech regulation
To be fair, this is the policy the two parties find some kind of consensus. The US President Donald Trump was conducting antitrust policies against Google and Facebook, claiming them in unfair actions, Joe Biden will look at the tech giants from a different point of view. His administration will focus mostly on antitrust and privacy regulation. This news may drag some of the biggest stocks down in the mid-term.
This fact is bearish for the stock market.
4. Trade regulation
After the aggressive trade policy conducted by Donald Trump towards China, markets hope that the President-elect Joe Biden will take a more flexible approach to confront Beijing.
This fact is bullish for risky assets.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.