A look back: Shares rose after Trump’s 2017 tax cuts cashed on supercharged corporate gains, then fell at a record rate when Covid-19 began beating the United States. Since then, however, they have risen higher, repeatedly reaching historic highs. The deep political polarization and a worsening pandemic were not enough to stop Wall Street.
Biden did not emphasize Trump on actions as much as an indicator of the country’s power or well-being.
“The idea that the stock market is booming is his only measure of what’s happening,” Biden said of Trump in the final presidential debate in October. “Where they come from in Scranton and Claymont, people don’t live on the stock market.” (According to the latest Gallup poll, 55% of Americans have some exposure to the stock market, many through retirement accounts.)
Even so, Wall Street will watch to see if the market momentum can be maintained. The conversation has grown in recent weeks, and corporate valuations, especially in the technology sector, have risen too much.
“Many investors are worried that the capital market has recovered too much and too quickly and that there are signs of excess starting to appear in certain parts of the financial system,” Peter Oppenheimer, Goldman Sachs’ global equity strategist, told clients this week. . “This is a reasonable concern, given that the return to action since the bear market fell in March last year has been remarkable.”
Oppenheimer said that while a correction – or a 10% drop in stocks from their recent peak – seems “increasingly likely”, the chances of the shares entering a new bear market, falling by 20% compared to recent highs, the following year appear “quite likely” low. “
It indicates expectations for strong global economic growth in 2021 as the pandemic eases, as well as unprecedented political support.
On that front, however, they remain unknown. While Federal Reserve Chairman Jerome Powell stressed that interest rates could remain at historic lows for the foreseeable future, the fate of Biden’s $ 1.9 trillion stimulus package will be based on his ability to generate a some Republican support. In a divided Washington, it will not be an easy task.
Netflix is coming of age, reaching 200 million subscribers
Last: the streaming service told investors on Tuesday that it now has more than 200 million subscribers globally, after adding 8.5 million in the fourth quarter of 2020 – exceeding its own expectations.
It wasn’t the only sign that Netflix had become a mature player in Hollywood and on Wall Street.
The company also said it would no longer have to borrow money to fund day-to-day operations and would explore returning cash to shareholders through share repayments.
Investor presentation: shares increased by 13% in premarket trading, reaching Wednesday to reach an all-time high.
Of course, competition in the streaming market remains fierce. ViacomCBS ‘newly rebranded streaming service, Paramount +, will go live in early March, the company said Tuesday – joining an increasingly crowded domain that includes Disney +, Apple TV +, Amazon Prime Video, Peacock from Comcast, HBO Max from AT&T and more.
But investors think Netflix seems to be in a good position to keep its place at the front of the pack. UBS, for example, updated the company’s shares to a “buy” rating after making gains, citing a strong overall growth in subscribers “even [against] increasing competition [and] robust growth “in the first half of 2020.
Rich Greenfield of LightShed Partners pointed out on Twitter that while investors previously seemed worried about how Netflix would fund its mass-produced content machine, the tone had changed.
The question now is, “What are you going to do with all the money you’re going to start making in 2022 and beyond?”
Janet Yellen presents Biden’s tough stance on China
Janet Yellen, nominated for President-elect Joe Biden to head the Treasury Department, made it clear that the incoming administration will maintain a tough approach to relations with China – setting the stage for prolonged tensions between the world’s two largest economies.
“China undercuts American companies by dumping products, raising trade barriers and subsidizing corporations,” she said.
The position was reiterated by Antony Blinken, Biden’s candidate for head of the State Department, in his comments before the Senate Foreign Relations Committee.
“President Trump was right to take a tougher approach to China,” Blinken said. “I don’t really agree with the way he did it in several areas, but the basic principle was the right one.”
What it means: The battle between the United States and China for trade and technology has been a key source of uncertainty for investors for the past four years. Under Biden, this will not go away.
It follows
Joe Biden will be sworn in as the next president of the United States at 12 pm ET.
Coming tomorrow: Economists are waiting for another 910,000 applications for unemployment benefits for the first time, a sign of the weakness of the US labor market.