Gold 1872,19
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EURUSD 1,2127
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DJIA 31145
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OIL.WTI 53,075
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DAX 13949,50
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Donald Trump left the White House on Wednesday, flying to Florida. As promised, he will not attend the inauguration of the new US president. It seems like the last election and the victory over Hillary Clinton was only yesterday, but it’s been four full years. Let’s look at the outgoing president’s results from a background market perspective.
S&P 500
Immediately after the 2016 election, the markets began a Trump rally. Stocks surged on expectations of tax cuts and overseas businesses coming back to America. Donald Trump constantly tweeted comments about more and more highs in the stock market. Symbolically, on the day of Donald Trump’s departure, the S&P 500 index again posted another all-time high.
By taking credit for the rise in stocks, the now former president hoped to be re-elected. He probably would have succeeded without too much trouble, but a coronavirus intervened. The long public denial of the problem collapsed the president’s ratings and prevented him from recovering from the damage to his reputation.
What can we expect from Joe Biden?
Raising individual taxes in the corporate sector seems to be a done deal. And this is a very worrying wake-up call for business and the stock market alike. However, new US Treasury Secretary Janet Yellen is rushing to the rescue. She is well known to most traders. She previously held the position of head of the Fed for several years.
In this position Yellen was known for her extremely dovish policy regarding interest rates and Fed asset purchases from the market. Analysts believe that she will maintain the same stance in her new position.
That means we are in for a massive bailout of the economy. And in case of a fall in the stock markets, pressure on the new US Fed leadership to participate in buying out more and more even toxic assets.
Further positives for the markets are the forecasts of a recovery of the world’s leading economies by the end of 2021. This could set the stage for a continuation of the long-term rising trend not only this year but also next 2022.
01.30 Australian Unemployment Rate for December
04.00 Bank of Japan Interest Rate Decision
13.45 ECB Interest Rate Decision
14.30 ECB press conference on monetary policy
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