In US, the inauguration of Joe Biden went off without any problem last Wednesday.

The new President dedicated it first day in the implementation of a strategy to fight against the Covid-19. Joe Biden is also trying to push through a $1.9 trillion stimulus program that many congressional Republicans do not like, and the economy may not need. On the economic front, weekly jobless claims retreated from a multi-month high but remained elevated, at 900,000, while IHS Markit’s preliminary manufacturing and services PMI in January surprised on the upside. The housing sector remained in great shape, with existing home sales and housing starts at their highest levels since 2006. Industrial sales rose 0.8% in November, while retail sales rose 2.9% YoY.

In Europe, governments continued to extend lockdown measures amid concerns about the spread of highly infectious mutations of the coronavirus. EU leaders hesitated to enact an EU-wide travel ban but warned that stricter lockdowns measures are likely to stay due to the new strains of the virus. On the economic front, December PMIs suggested a decline in overall activity, the third consecutive contraction in activity, as renewed lockdowns weighed on services. However, factory output expanded for a seventh month, though at a slower rate, due to growth in new orders, exports, and backlogs. EU CPI release confirmed the weakness of the latter as it remained at -0.3%. Deflationary pressures were evident across Europe. However, in UK, inflation edged higher in December on rising transport costs. The 12-month CPI inflation rate rose to 0.6%.

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