A look back: Shares soared after Trump’s tax cuts boosted corporate earnings in 2017, then plunged at a record pace when Covid-19 began hitting the United States. Since then, however, they have risen higher and repeatedly reached all the highs. Deep political polarization and a worsening pandemic were not enough to stop Wall Street.
Biden did not place as much emphasis on equities as Trump as a measure of the country’s strength or well-being.
“The idea that the stock market is thriving is his only measure of what is happening,” Biden said in the last presidential debate in October on Trump. “Where I come from in Scranton and Claymont, people do not live off the stock market.” (According to the latest Gallup poll, 55% of Americans have some exposure to the stock market, much through retirement accounts.)
Nevertheless, Wall Street will see if the momentum in the market can be maintained. Chatter has increased over the past few weeks that corporate valuations, especially in the technology sector, have jumped too high.
“Many investors are concerned that the stock market has bounced back too far and too fast and that there are signs of a surplus in parts of the financial system,” Peter Oppenheimer, Goldman Sachs’ chief global equity strategist, told clients this week. “This is quite worrying as the upswing in equities since the valley market in March last year has been remarkable.”
Oppenheimer said that although a correction – or a 10% drop in equities from their recent high – “seems increasingly likely”, shares in a new bear market appear likely to fall 20% in the next year. of recent highs, low. “
He points to the expectations of strong global economic growth in 2021 as the pandemic eases, as well as ‘unprecedented’ policy support.
At the front, however, there remain strangers. While Federal Reserve Chairman Jerome Powell has stressed that interest rates may remain at historic lows for the foreseeable future, the fate of Biden’s $ 1.9 billion stimulus package will depend on its ability to gain Republican support. In a divided Washington, this will not be an easy task.
Netflix comes of age because it gets 200 million subscribers
The latest: The streaming service told investors on Tuesday that it now has more than 200 million subscribers worldwide, after adding 8.5 million in the fourth quarter of 2020, beating its own expectations.
This was not the only sign that Netflix had developed into a mature player in Hollywood and on Wall Street.
The company also said it would no longer need to borrow money to finance day-to-day operations, and that it would investigate the return of cash to shareholders through share buybacks.
Investor Insights: Shares are up 13% in the foreground trading, rising to a high on Wednesday.
The competition in the electricity market, of course, remains fierce. ViacomCBS ‘newly redesigned streaming service, Paramount +, will go live in early March, the company said on Tuesday – joining an increasingly busy field that includes Disney +, Apple TV +, Amazon Prime Video, Comcast’s Peacock, AT & T’s HBO Max, and more.
But investors believe that Netflix is in a good position to retain its place at the front of the package. UBS, for example, upgraded the company’s shares to a ‘buy’ rating after earning earnings, citing continued strong global subscriber growth, even [against] rising competition [and] strong growth “in the first half of 2020.
Rich Greenfield of LightShed Partners pointed out on Twitter that although investors had previously expressed concern about how Netflix would fund its massive content production machine, the tone had changed.
The question now is: “What are you going to do with all the cash you are going to generate in 2022 and beyond?”
Janet Yellen looks at Biden’s difficult attitude towards China
Janet Yellen, the presidential nominee for the presidency, Joe Biden, to lead the treasury leadership, has made it clear that the incoming government will maintain a tough approach to deal with China and set the stage for long-standing tensions between the two largest economies in the world.
“China is undermining American companies by dumping products, setting up trade barriers and giving away subsidies to corporations,” she said.
Antony Blinken, Biden’s nominated candidate to head the foreign ministry, submitted comments in his comments to the Senate Foreign Relations Committee on Tuesday.
“President Trump seemed to be taking a stricter approach to China,” Blinken said. “I do not very much agree with the way he went about it in a number of areas, but the basic principle was the right principle.”
What this means: The United States-China dispute over trade and technology has been a major source of uncertainty for investors for the past four years. Under Biden it does not go away.
Following
Joe Biden is sworn in at 12 o’clock ET as the next president of the United States.
Come tomorrow: Economists expect another 910,000 claims for unemployment benefits, a sign of weakness in the US labor market.