Breaking in the Biden administration with a fresh all-time high, the Dow Jones Industrial Average’s inauguration day gains fed into the European open this Thursday.
The 46th President of the United States was aggressive in first few hours after taking office, announcing 17 executive actions, with 15 of those executive orders. These include reversing Trump’s Muslim travel ban, halting the construction of the US-Mexico border wall, and putting things in motion for the States to re-join the Paris climate agreement. Biden has also mandated the wearing of masks and social distancing in federal buildings and lands.
It appears that Biden isn’t messing around. And it is exactly this purposeful and robust approach the markets were hoping for – especially if it leads to his $1.9 trillion covid-19 stimulus package escaping the Senate unscathed.
If lagging behind its peers in terms of where it is at overall, the FTSE still rode the morning’s momentum higher, climbing half a percent to a 6-day peak of 6,770.
That the UK index rose to such an extent despite the pound rallying – sterling was up 0.4% and 0.3% against the dollar and euro respectively – reflects the underlying positive sentiment this Thursday.
There is cause for the FTSE and pound to worry, however. A study from Imperial College London suggests that the post-lockdown drop in coronavirus cases may have plateaued – in some areas numbers are actually going up. Though it is questionable how much further restrictions might help, the government may feel like they have no choice but to act, potentially setting the UK markets up for a fall.
A 0.8% push from the DAX finally saw the German bourse stick a pinkie back above the 14,000 mark, leaving it at a rough 10-day high. The CAC, meanwhile, nudged towards 5,650 with a 0.4% rise.
It’s a busy one for the Eurozone. Thursday brings the first ECB meeting of 2021, and though the central bank isn’t expected to announce any changes, the press conference will give investors the chance to gauge where Christine Lagarde and her colleagues are at coming into the New Year.
The Dow Jones is heading for a timid 40 point increase this afternoon. However, at the moment, the Dow is in the envious position of hitting a fresh record peak every time it sneezes.
Its ability to maintain growth is going to be informed by this afternoon’s jobless claims reading. Last week saw the worst figure since the end of August 2020. And while analysts have it falling from 965,000 to 935,000, a relatively minor miss could see it back above 1 million.
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