Today there will be several highlights in the world of finance.
First off, there are a bunch of important fundamental reports being published today. Inflation rate data for the first quarter of 2021 in Australia opened the economic calendar today to the disappointment of investors, as the rate failed to meet the forecast.
In Europe, Germany also brought disappointment as its GfK consumer confidence survey was considerably lower than the forecast for May. Recall that Angela Merkel only recently managed to pass a law to permit the government to establish nation-wide Covid-19 measures, which the country might still need for some time.
But without a doubt, the United States will be the place with the most interesting announcements today. The Federal Reserve is concluding its April monetary policy meeting today and Chairman Jerome Powell will be giving a press conference afterwards. No changes are expected but investors continue to hope for a hawkish signal from the Fed.
Moreover, President Joe Biden will be premiering his third spending bill in barely three months since the beginning of his presidency. Dubbed the American Families Plan, this $1.8 trillion bill will make child care more affordable for lower and middle income families, make community college free, and offer other boosts to help improve childcare and education.
Together with the American Jobs Plan, this proposal is likely going to be met with strong resistance by Senate Republicans, perhaps even some moderate Democrats who are wary of Biden’s deep borrowing.
Still, Biden’s administration has proposed several tax increases to affect America’s richest in order to fund these programs to help the poor. If the aggressive tax increase is approved, the cost of the American Families Plan will be recovered in 15 years.
Because of the importance of the announcements coming from the President and the Federal Reserve, today US stock indices will show a mixed bias. The earnings season also continues. Google’s parent company Alphabet already shone with record earnings in the previous session, and today investors expect to hear from Facebook and Apple.
