This week the stock markets began trading slightly lower than they closed the previous one. It is possible that the optimism about coronavirus vaccines driving the stock rally has run out of steam, after propelling the major indices higher for several weeks.
Still, traders following the stock market might be interested in AirBnB, which is the most interesting IPO at the end of 2020. The company just raised its valuation, despite many considering the tourism sector to be the worst hit segment of the economy by the pandemic.
The next glimmer of hope for US stock indices are the recently revived stimulus negotiations between Democrats and Republicans. If agreement is reached on the $908 billion plan, stocks could resume their rally.
In Europe, there is a negative move in stock markets as well due to the upcoming final deadline for a Brexit deal. The United Kingdom and the European Union arguably have only until the end of this week to reach a compromise. The EU is having a summit on Thursday and Friday, which will be the last opportunity for EU leaders to be gathered together, and therefore it’s the final good occasion for agreeing on the bloc’s future relationship with the UK.
Talks have gone on in London and both sides still seem determined to reach a deal. However, France warned that if the EU tries to make too many compromises, it will veto the deal.
Any agreement between the United Kingdom and the EU must be ratified in full by all parties before the year’s end. Otherwise, trade between the two will default to WTO rules come January 1.
Speaking of vetoes, Hungary and Poland are given a last chance to withdraw theirs regarding the European Commission’s stimulus plan. The two countries vetoed the bill last week because they did not like a clause tying the inflow of funds to respecting the rule of (EU) law, putting the economic recovery of the European Union in question.
But today EU officials stated that if the two countries do not retract their vetoes by tomorrow, the bloc will draft a new plan for only 25 member states, thereby excluding Poland and Hungary from the list of beneficiaries.
There are legal provisions for such agreements where willing EU member states could pursue joint agreements without the agreement of the entire bloc. This means that within a few weeks, 25 EU countries could have secured funding to recover from the pandemic, leaving Poland and Hungary to fend for themselves.
In other news, China continues to shine economically, having found a silver lining in the coronavirus pandemic. The country’s exports soared in its latest report, largely because China is the biggest exporter of protective gear such as masks and face shields. China is still on track to be the only major economy to actually grow in 2020, while virtually everyone else is in a recession.
