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Original title: world blockbuster! The United States Senate approved a 1.9 trillion dollar bailout plan! Are global financial markets happy or bad?
Source: China Securities Journal
The global financial market ushered in a difficult time.
On Saturday local time, the United States Senate voted to approve President Biden’s new $ 1.9 billion crown bailout plan. It is worth noting that after an all-night meeting, 50 Democratic congressmen voted for the “American Rescue Plan” and none of the Republican congressmen voted in favor.
Fueled by the much higher-than-expected growth in non-farm data in February, US stocks collectively opened higher on Friday local time. Once the Senate passes the bailout plan, how will US equities and global capital markets be affected?
Large-scale stimulus plan approved
This stimulus is reported to be one of the largest economic stimulus plans in US history. The final bill includes a one-time payment of $ 400 billion to most Americans and an extension of $ 300 a week for the 9.5 million unemployed during the new crown crisis Unemployment benefits, as well as 350 billion dollars in aid to state and local governments that are running huge budget deficits due to the epidemic.
Biden welcomed the passage of the bill and promised that the bill will help end the epidemic. Biden said: “I promised the American people that help is on the way. The whole content of this plan is to alleviate suffering, meet the most urgent needs of the country and put us in a better position.”
Although Friday’s employment report showed that the number of US jobs increased in February, adding 379,000 jobs, the US has yet to recover the 9.5 million jobs lost since last year. The White House stated that it may take several years to fully restore employment.
The United States Senate voted at noon on the 6th to approve a $ 1.9 trillion economic rescue plan. The plan will be returned to the House of Representatives for reconsideration and a vote (a slightly different version was approved by the House of Representatives a week ago). After the House of Representatives finally passes it, it will finally be handed over to the President of the United States, Biden, and made into a bill upon signature.
Is the global market happy or bad?
FXTM market analyst Chen Zhonghan told Zhongzheng Jun that the US Senate approved Biden’s $ 1.9 trillion fiscal stimulus plan this weekend. As a result, investors became more concerned about the risk of the US economy overheating, then the global market starts next week. be more turbulent.
Swiss Baida noted in the latest report that the US Senate approved US President Biden’s $ 1.9 trillion stimulus package to continue injecting capital into powerful US consumers. This can cause nominal bond yields to rise, leading to market adjustments. However, this change was driven by higher real returns, not higher inflation expectations. Looking ahead, a major factor in the impact of the US equity market will be the rate of increase in bond yields.
The IACC believes that the new round of fiscal stimulus will occupy the quota of the budget mediation process in the short term, leading to a relative postponement of large-scale infrastructure and fiscal reform policies. It is positively important for increasing residents’ disposable income and increasing consumer spending. Combined with the epidemic and vaccine progress, US growth faces upside risks. In terms of asset prices, it is generally positive for US stocks, US Treasuries (real interest rates), and even the US dollar index.
GF Securities believes that the experience since the outbreak of the epidemic is: before and after the implementation of the fiscal stimulus and when the outlook for the epidemic is clear, foreign markets will increase the appetite for risk, US stocks are strong and the US dollar is weak. ; Sentiment will cool, US stocks will fluctuate, and the dollar will rebound. Therefore, in the next quarter, under the expectations of the third round of fiscal stimulus, foreign markets are expected to usher in another round of increased risk appetite. During this period, US stocks continued to rise, the US dollar weakened again, and internationally traded commodities (non-ferrous metals, crude oil, etc.) are also expected to perform positively.
GF Securities also noted that this will also be the last round of anti-epidemic stimulus in the United States, and its effectiveness will likely weaken significantly from the end of the second quarter to the beginning of the third quarter. Changes in the Fed’s monetary policy before and after the herd immunity overlap. Therefore, US stocks from the end of the second quarter to the beginning of the third quarter Adjustment risk is great, and US stocks will also usher in a long-term change of style after adjustment.
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