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Weekly financial market overview 22.02.-28.02.

News - March 1, 2021

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Konstantins Goluzins, CFA



Head of Asset Management
Phone.: (+371) 6700 0456
E-mail: trust@bib.eu

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Main events of the previous week

 

The US House of Representatives has approved a $1.9 trillion economic bailout package prepared by President Joe Biden's administration. 219 members of the House of Representatives voted for the bill, while 212 voted against it. The total volume of the aid package is equal to almost 10 percent of the country's GDP. The bill provides for the allocation of $400 billion to combat the spread of the coronavirus, about $1 trillion will be allocated to help citizens affected by the pandemic and restrictive measures, the rest of the money will go to stimulate economic growth. With this program, Biden aims to create millions of new jobs. In addition, direct payments to private households, funding for coronavirus tests and COVID-19 vaccinations, and additional assistance to the unemployed are provided. After the adoption of the bill by the House of Representatives, the document will go to the Senate in early March. In the Senate, part of Biden's plan has already failed to raise the national minimum wage to $15 an hour, which now stands at $7.25. As a result, this measure was excluded from the bill. Biden and his Democratic Party are pushing for the package to be fast-tracked by March 14, when the extended and increased unemployment relief expires. In the Senate, Democrats and Republicans each have 50 votes, but in the event of a stalemate, Vice President Kamala Harris, who is also the chairman of the upper house of parliament, can cast her vote. Republicans oppose the adoption of such an extensive new aid package.

Economic data

 

Eurozone. The consumer price index in January rose by 0.2% versus December, while the annual inflation rate was 0.9%. The growth of the core inflation rate, excluding food and energy, amounted to 1.4% y/y in January.

US. According to a second estimate, Q4 GDP grew 4.1% year on year (compared to Q3 2020).

The number of initial jobless claims for the week was registered in the amount of 730 thousand, which is 111 thousand less than the previous week and 80 thousand less than analysts predicted.

Home sales in the primary market in January increased by 4.3% compared to December and amounted to 923 thousand in annual terms, which is 73 thousand more than analysts had predicted.

The volume of orders for durable goods in January increased by 3.4% versus the previous month. The base indicator, excluding civil aviation, grew by 1.4% over the same period.

In January, thanks to payments of aid from the state, the level of personal income increased by 10% MoM, while in December incomes showed an increase of 0.6%. The level of personal spending in January increased by 2.4% compared to December.

Key events this week

  • On Monday, the level of business activity in the industrial sector in February will become known in the US, China and the Eurozone.
  • On Tuesday, the level of inflation in February will become known in the Eurozone.
  • On Wednesday, the change in oil reserves for the week will be published in the United States.
  • On Thursday, data on retail trade and unemployment in January will be announced in the Eurozone and in the US the number of initial jobless claims for the week will be published.
  • On Friday, the US will publish data on the trade balance for January, as well as the state of the labor market in February.

The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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