All three indices on Wall Street broke new records, but Paris got stuck between Brexit negotiations and talks about the US stimulus package.
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The week of December 4 marked the end of a “year-end rally” ahead of time (five successive weekly increases). Since then, investors have eased off and the Cac 40 has stagnated, a little above 5,500 points.
The circulation of the virus remains intense and pushes many countries to tighten their measures of restriction of movement, which slows down the fragile economic recovery. In the United States, the first vaccination campaign began with the product from Pfizer / BioNtech and the vaccine from Moderna received the green light from the FDA expert committee on Thursday. This fuels the hope of eradicating the virus one day, but in the short term, the latest economic figures are worrying, such as retail sales in November or requests for weekly unemployment benefit.
The Federal Reserve, which met its last committee of 2020 on Tuesday and Wednesday, rather reassured: the pace of asset purchases of $ 120 billion per month has not been changed and the commitment to maintain federal funds rates close to zero, until a full economic recovery (not expected in 2021), has been maintained. Clearly, the Fed is staying the course and affirming that all the support tools remain on the table, ready to be deployed. In the meantime, Jerome Powell, its president, again called in his speech for strong congressional action. However, the famous $ 900 billion fiscal stimulus plan has still not been voted on, even though negotiations are progressing well, according to various sources. It includes checks of $ 600-700 for households and federal unemployment benefits of $ 300 per week until the end of March. The program also provides 325 billion for SMEs.
In Europe, negotiations between London and Brussels on post-Brexit relations remain complicated. The suspense over a last minute deal remains.
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SYLVIE AUBERT
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