January 24, 2021

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Wall Street wins because Trump backs away

Wall Street wins because Trump backs away

The US stock markets started trading in gains on Thursday. Wall Street investors are happy that President Donald Trump has finally promised an “orderly” transfer of power. The financial markets are also hoping that his successor Joe Biden will soon come up with a comprehensive new support package to help the American economy cope with the corona crisis.

Half an hour after the opening bell, the Dow Jones Index was up 0.5 percent at 30,977 points. The broad-based S&P 500 gained 1.2 percent to 3,791 points and the Nasdaq tech meter gained 1.8 percent to 12,970 points.

On Monday, the interest rate hike was still putting price pressure on many highly valued technology stocks in anticipation of additional economic support. Investors hardly seem to notice, although interest in 10-year government paper has surged further to 1.06 percent.

Investors were not fooled by the riots in Washington on Wednesday, where supporters of Trump stormed the Capitol. It was more valuable to them that the Democrats emerged victorious in the second round of the Senate elections in Georgia, as it will make Biden much easier to implement his policies.

The economic news has little effect on sentiment. The number of WW claims fell slightly last week to 787,000, while the trade deficit appears to have widened further.

Electric car maker Tesla is up another 4 percent, approaching $ 800 after Canadian bank RBC raised its recommendation.

Starbucks rose 0.3 percent. The well-known coffee chain has announced that Finance Director Patrick Grismer will be leaving next year. He will be replaced by Rachel Ruggeri, who already holds a leading position in the company.

L Brands also grew by almost 2 percent. The company behind lingerie brand Victoria’s Secret reported that sales during the holiday season were above expectations.

In addition, American Airlines has announced (plus 1.6 percent) that it will no longer offer alcohol on flights to and from Washington. According to the airline, this is a precautionary measure due to the unrest in the American capital. Twitter (minus 1.3 percent) and Facebook (plus 2.4 percent) have also taken action. They temporarily closed Trump’s accounts.