Financial markets have eliminated the violence and chaos on Capitol Hill with both the Dow DJIA,
and S&P 500 SPX,
hitting new highs on Wednesday and the Nikkei 225 setting another 30-year record on Thursday.
But investor optimism could ease as we continue through 2021, as Citi’s global strategic team said global stocks will be uniform throughout the year. call of the day.
The investment bank’s strategies predicted only a 2% increase in the MSCI All Countries World Index 892400,
over 2021 and neutralized their inclination for growth sectors in favor of a rotation in value stocks.
The drop in temperature from their long-term growth trend, which has historically maintained its rating on the overweight US market, is part of the reason behind the downgrade of the US market to neutral.
They also saw the US fiscal deficit as a threat to the dollar, which they expected to weaken this year, boosting emerging markets and commodity stocks.
But bond yields could be high, helped by a recovery in the global economy, with Citi forecasting that the 10-year US Treasury yield (currently at 1%) will reach 1.25% in the coming months and 1.45% by the end of the year. . They said this should help financial and energy companies, which are valuable shareholders.
The best yields are expected in the UK, where Citi forecasts a 7% increase for the FTSE 100 UKX,
and Australia, where S & P / ASX 200 XJO awaits,
to increase by 6%. Emerging markets, especially China, Korea and Russia, are selected by growth strategies.
Their “slightly optimistic” view of global action depends on the success of COVID-19 vaccines in reviving the world economy. Citi economists predict a 5% increase in global gross domestic product in 2021, after a 3.9% contraction in 2020.
Both factors should stimulate the recovery of corporate profits, with earnings per share in the most affected sectors returning the most.
Citi strategists said much of their recovery forecasts could already be quoted in the market, as the MSCI All Countries World Index trades 20 times the consensus earnings per share – much higher than the long-term median of 15 times . By this measure, the USA is the most expensive of the major markets, and the United Kingdom the cheapest.
In terms of sentiment, Citi said that we are deep in the territory of euphoria in the US panic / euphoria index, indicating that corrections could come. Their suggestion? Buy a bathroom.
Buzz
President Donald Trump has acknowledged defeat in the US presidential election, saying there will be an “orderly transition” to power. His concession came after Congress certified the winnings of Joe Biden and Kamala Harris, voting through the night, after a violent pro-Trump mob stormed Capitol Hill on Wednesday.
Also: Why the stock market gathered even when a violent mob stormed the Chapter
Technology giants Facebook FB,
and Twitter TWTR,
has taken steps to limit Trump’s ability to communicate with supporters during the Capitol Hill siege, temporarily blocking his accounts amid four life-threatening violence.
Which add: World leaders Boris Johnson, Justin Trudeau and others condemn “shocking” and “shameful” scenes from the US Chapter
Senior members of the Trump administration have discussed the possibility of invoking the 25th Amendment to the Constitution, according to CBS. If he invoked – for the first time in history – he would remove Trump from the presidency and make Vice President Mike Pence commander-in-chief.
Read more: Refresh? The 25th amendment? Various ideas have floated to end the Trump era now
US officials are considering banning Americans from investing in Alibaba and Tencent, the most valuable Chinese listed companies. This would mark an expansion of Trump’s late administrative effort to blacklist investments in Chinese companies linked to the country’s military.
Sports betting actions such as DraftKings DKNG,
Caesars CZR,
and MGM Resorts MGM,
rose to trading late Wednesday after New York Governor Andrew Cuomo changed his tune in terms of legalizing the practice. Cuomo said New York has the potential to be “the largest sports betting market in the United States.”
markets
YM00 stock futures,
ES00,
they are slightly upward, ready for an easy but positive opening to continue the record highs reached by Wednesday’s rally. Asian markets NIK,
HSI,
SHCOMP,
ticked while European stocks SXXP,
UKX,
DAX,
PX1,
trades right above the plan.
The market is reacting positively to the democratic battle initiated by the two Senate victories in Georgia, which improve the chances of a greater fiscal stimulus, as Vice President-elect Harris would cast a tie.
Read more: Democrats win Georgia election, giving their party control of the US Senate
Chart
U.S. Treasury yields, shown in our chart of the day from Marshall Gittler to BDSwiss, rose sharply as Georgia’s two Senate races were called for Democrats. 10-year yields TMUBMUSD10Y,
increased by 8 basis points to 1.04% – for the first time exceeded 1% by mid-March 2020.
Tweet
Research by YouGov found that one in five voters approved of the assault on the Chapter and that a majority of Republicans blamed President-elect Biden for it.
Random readings
A new pub makes a roaring trade during closing after opening in a nursing home.
On the call: the “Very Cold” llama was found wandering the highway in Massachusetts.
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