The US will remain focused on Biden’s $1.9 trillion stimulus plan this week, while the UK is facing a Q4 GDP reckoning.
US: Stimulus Plan
Until the stimulus package is enacted – the Democrats want to sign the American Rescue Plan into law by March 14th – the progress of the bill is going to remain near the top of the list in terms of investors’ concerns.
Reflecting the game-changing nature of January’s Senate race victories in Georgia, the Democrats passed a budget resolution – with Vice President Kamala Harris casting the deciding vote – allowing the in-power party to push forward with the budget reconciliation process. The Biden administration isn’t guaranteed to go down this path; the President is still seeking a bipartisan solution. However, if the Republicans don’t play ball, the framework is in place for the Democrats to move forwards on their own.
Investors will also be on the lookout for any hiccups in the vaccine rollout stateside. Currently around 1.3 million Americans are being vaccinated daily, with more than 30 million people having had received their first dose. However, Dr Anthony Fauci has said that there is still ‘much more demand than there is supply’. A vaccine shortage like we have seen in the Eurozone could undermine confidence in the US markets.
Beyond that, the economic calendar doesn’t have too much to offer this week. The JOLTS job openings figure is out on Tuesday, followed by inflation – which rose to 0.4% last month – on Wednesday, jobless claims on Thursday and consumer sentiment on Friday.
US: Stocks to Watch
While the big tech stocks have all reported, there are still a fair few recognisable names left to update investors this earnings season.
One of those firms is Twitter, which posts its fourth quarter figures on Tuesday. The social media company’s Q3 numbers were a bust, unveiling 187 million active daily users against the 195 million forecast – that was an addition of just 1 million new users across the quarter. If the pace of additions didn’t pick up during Q4, the stock could be in trouble.
The rest of the calendar sees Coca-Cola and General Motors report on Wednesday, followed by Disney and PepsiCo on Thursday.
UK: Economic Growth
The undoubted highlight of the UK’s trading week is Friday’s first glimpse at fourth quarter growth.
Estimates place Q4 GDP at just 0.9%, a colossal downturn from the 16% rebound see in the third quarter. However, that might be just fine with investors; at points it seemed a lock that the UK economy would contract in the final 3 months of 2020.
Coming alongside the GDP data this Friday are the construction output, goods trade balance, industrial and manufacturing production readings.
UK: Stocks to Watch
As for corporate updates, Electrocomponents is up on Monday, with Ocado, Micro Focus International and Bellway on Tuesday, Dunelm on Wednesday, and AstraZeneca on Thursday.
Germany dominates the Eurozone’s economic calendar this week, with industrial production on Monday, trade balance on Tuesday and inflation on Wednesday. The country will also feature heavily in Thursday’s EU economic forecasts.
Elsewhere there is the region-wide Sentix investor confidence number on Monday, and Italian, French and Eurozone-wide industrial production on Tuesday, Wednesday and Friday respectively.
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