There are a couple of important events on the economic calendar today. First off, the World Economic Forum is taking place in Davos, Switzerland today. Due to the coronavirus pandemic, the event is going to be in a virtual format and will last for a couple of days. The world’s most important figures, including Angela Merkel and Xi Jinping will come together to discuss the topics of trust and cooperation, and how the world can move forward together in light of the global crisis that Covid-19 has caused.
In addition, the International Monetary Fund will publish its revised forecast for economic growth for 2021. Due to the new highly-contagious variants of Covid-19 and the much slower-than-expected pace of vaccinations, the forecast will likely be worse than the previous estimate.
The United Kingdom today presented several employment-related reports. The unemployment rate dropped to 5% in November, better than the forecast of 5.1%. Employment change in October was also better than anticipated. The November earnings reports also exceeded investors’ expectations.
Later in the day we expect the January consumer sentiment report from the United States.
There has also been some encouraging data on global trade, which indicates that the trading volume towards the end of 2020 resembled pre-pandemic levels; industry is also recovering globally, as it is not affected by the lockdowns in the way the services sector is.
The stock indices in the US today are showing mixed results due to the presence of clashing factors. There will be lots of earnings reports to affect companies’ share prices, so watch out for Microsoft, AMD, Verizon, and General Electric, among others.
Meanwhile, on Capitol Hill President Biden is beginning the fight for the 1.9 trillion dollar stimulus bill. The price tag is facing criticism from the Republican Party but Biden has signalled he is willing to compromise. However, if the administration delivers a considerably lower stimulus than expected, investors are likely to turn back to safe havens.
In other news, the world officially surpassed 100 million coronavirus infections. Still, the pandemic appears to be slowing down in some of the most affected countries (such as the United States, India, the UK, France, and Germany). Spain, however, remains in trouble.
