By Noreen Burke
Investing.com – Renewed hopes for economic stimulus and the start of vaccine exhibition are the main focus for financial markets in the coming week. The pressure is growing in Washington to help people and businesses hit hard by the pandemic, and the economy suffered the worst downturn in decades. The central indexes of Wall Street jumped Friday to the all-upper strata, but there may be more volatility in store, as recent restrictions to curb the spread of the virus take effect. In Europe, long-running Brexit talks are coming in the final stages, and the European Central Bank will probably announce another stimulus expansion on Thursday, as the pandemic continues to disrupt the euro area economy. Here’s what you need to know to start your week.
- Stimulus conversations gain momentum
Data on Friday showing the slowest in six months reinforced investors’ expectations for a new financial stimulus bill to help revive the economy. More than 13 million people will lose their unemployment benefits on December 26 without prompt action by Congress.
A $ 908 billion coronavirus aid plan got into Congress Friday after a months-long standoff between Republicans and Democrats over the size of the potential package.
But it remains unclear whether Senate Majority Leader Mitch McConnell would agree to such a large package after pushing to keep relief spending near the $ 500 billion mark.
The two parties also face a December 11 deadline to implement a $ 1.4 trillion budget or risk a government shutdown. Political analysts said the two events could be linked, but Congress could also approve a draft resolution without including incentives.
- Start vaccine to start
The UK is preparing to become the first country to round out the vaccine developed by Pfizer (NYSE 🙂 and BioNTech (NASDAQ 🙂 the week when governments around the world enter a new stage in tackling the pandemic.
The first doses are set to be administered on Tuesday, with the highest priority given to the over 80s, frontline healthcare workers and care home staff and residents.
Britain has approved recent new revenue for Pfizer / BioNTech vaccine – leap forward in global race to launch most critical mass inoculation program in history.
In the US. US, the Food and Drug Administration is to vote on emergency-use license for the Pfizer / Biontech vaccine on Thursday, and initial vaccinations could be started as early as Friday with hopes of reaching 20 million people by the end of the year.
- Potential volatility in the market
The three main Wall Street indices on Friday hit recommended highs amid expectations that the saddest U.S. employment report could spur policymakers to push harder for stimulus. Positive uxin updates have also eased investors worry about dirty economic data and a massive surge in infections.
But while a vaccine is on the way, restrictions will remain in place until a critical mass of the population is inoculated and this could take several more months.
Investors will closely monitor the political developments in Washington and the logistics of the vaccination and the economic impact as the close back. In California, the San Francisco Bay Area Sunday night in lockdown amid a record surge in virus cases that threaten to overwhelm hospitals.
- Brexit talks live endgame
Negotiators from the UK and the European Union on Sunday held last-ditch talks to reach a post-Brexit trade deal before a transition agreement ends on 31 December.
If they do not reach an agreement, a five-year Brexit divorce will end mesmerizing just like Britain and its former EU. Partners ravage the economic cost of the coronavirus pandemic.
Experts have warned that a non-trade scenario would cause huge long-term disruption to the British economy. The EU Is Britain’s biggest trading partner, accounting for 47% of its trade in 2019.
A non-trade would hit and could also wipe out an extra 2% off British economic output in 2021 according to Britain’s Office for Budget Responsibility, while driving up inflation.
- ECB to announce another stimulus expansion
When the euro zone returns in recession in the fourth quarter, European Central Bank President Christine Lagarde is expected to announce another expansion of its stimulus package.
Eurozone inflation remained in negative territory for the fourth straight month in November, amid concerns that the dip in prices could be more persistent than feared.
Inflation is likely to be the main topic of discussion at Thursday’s meeting, as policymakers are increasingly worried that a deep and prolonged recession will make deflationary forces more permanent.
– Reuters contributed to this report