The swearing-in of the new US President; Joe Biden, has caused many discrepancies in the world stock market and the value of the dollar this past Thursday. Stock prices are skyrocketed, and the dollar fell as investors began to bet major stimulus. Surprisingly, Asian stocks have reached all-time highs overnight and are predicted to keep rising. MSCI’s global index shows that nearly 50 countries added 0.3% to the 76% rally since the market crash due to COVID last March.
It has been reported that Republicans in the US Congress have stated they will cooperate with the Biden administration in the US’s top priority $1.9 trillion fiscal-stimulus plan to get the economy up and running. There are still some oppositions against the plan, but the final amount is expected to fall at least 5% of the US gross domestic product. Chief economist at BNY Mellon investment management; Shamik Dhar states that the benefit of a larger stimulus is viewed as outweighing the negative impacts of regulation and taxes. He supports this fiscal-stimulus plan and expects the monetary policy to remain largely loose to the public.
In the past weeks, many European countries such as Ireland and Germany have tightened COVID regulations and the pandemic lockdown. The economy has seen a slow rejuvenation as vaccination programs start to appear. In the past day, the Euro has been slowly trending up, around 0.3% but still remains in the price range of $1.20 to $1.23.
Many other companies have seen major share increase such as Netflix with growing nearly 17% on Wednesday after announcing its move away from borrowing to finance its platform. As well as other tech giants such as Facebook, Apple, Amazon, and Alphabet which jumped 5.3%.
But even with the positive outlook on the economy, there have been some accusations by the Chinese government toward certain top officials under the administration of the Former President. These sanctions are seen to just be an attempt to plat to partisan divides and hold no impact on the outlook of the market, the Biden administration claims.
Yet an unforeseen impact of the growing economy has between slightly rising oil and gas prices within certain states, which worries some economists. These rising gas prices are most likely to be seen to dip down once the initial financial rush is over, yet it is advised to keep an eye out for this situation.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.