Weekly Market Update

Author : Rachel Poole
Date : January 9, 2021

Global Market News

Global equities continue their rise
Overlooking the chaotic events in Washington D.C. this week, global equities made gains. The yield on the 10-year US Treasury note rose above 1.00% for the first time since the beginning of 2020, ending the week at 1.12%. The price of a barrel of West Texas Intermediate crude oil rose several dollars to reach $52.58 after Saudi Arabia announced a large production cut. Volatility, as measured by the Cboe Volatility Index (VIX), decreased slightly to 21.

US nonfarm payrolls dip as Covid-19 cases rise
US nonfarm payrolls dropped in December as Covid-19 cases continued to rise. The reimposition of restrictions aimed at curtailing the spread of the disease during the holidays lead to a decline of 140,000 jobs. Consensus estimates had previously predicted a gain of 50,000-75,000 jobs. As vaccine availability increases and additional stimulus checks are sent out, analysts see December as a temporary setback.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 88,200,000 Global Covid-19 deaths: 1,900,000
US Confirmed Covid-19 cases: 21,700,000 US Covid-19 deaths: 365,000
*As of Friday evening

US records highest daily Covid-19 death toll
On Thursday, more than 4,000 people died from Covid-19 in the US, bringing the nation’s total death toll to more than 365,000. December marked the country’s deadliest month for Covid-19 and health officials warn that January could be worse. Vaccination campaigns have begun to ramp up in several states with about 6 million people vaccinated with the first dose of either the Moderna or BioNTech/Pfizer vaccine. Meanwhile, a couple of new Covid-19 variants have popped up around the world which are more contagious but not proven to be more deadly or more tolerant to the vaccines.

Geopolitics Spotlight

Gulf countries end years-long Qatar blockade
At a Gulf Cooperation Council summit on Tuesday, a breakthrough agreement was made to end the political rift between Qatar and its Gulf neighbors. Saudi Arabia and the United Arab Emirates announced they will reopen their borders and airspace to Qatar after boycotting the country since 2017 for its alleged support of terrorism.

EU stops recognizing Guaido as Venezuela’s rightful president
After claiming victory in the December elections, the political party of Venezuelan dictator Nicolas Maduro retook Venezuela’s national assembly. Observers, including the US and European Union (EU), have called the elections fraudulent. However, the EU has stopped recognizing Juan Guaido, opposition leader and former head of the National Assembly, as the interim president of Venezuela. This is a serious blow to Guaido’s campaign to remove Maduro from power.

US Social & Political Developments

Extremist pro-Trump mob storms the US Capitol building
January 6th, 2021 will forever be remembered as a dark and tragic day in US history. A pro-Trump mob attacked the US Capitol building, pushing past police in an attempt to stop Congress from certifying Joe Biden’s victory of the 2020 presidential election. Despite the traumatic events, Congress reconvened later that evening to formally certify Joe Biden as the next US President. Many are blaming President Donald Trump for inciting his supporters to violence. The event has prompted Speaker of the House Nancy Pelosi to urge Vice President Mike Pence to invoke the 25th Amendment which would allow for the immediate removal of President Trump.

Democrats win Georgia’s Senate run-off
Democrats Jon Ossof and Raphael Warnock beat their Republican counterparts in Georgia’s Senate run-off election this week, making it official that Democrats will control the Senate. The 2020 elections have resulted in a blue-sweep, with the Democrats taking control of Congress for the first time in 10 years.

Corporate/Sector News

Oil prices jump after Saudi Arabia production cuts
Oil prices rose on Tuesday after Saudi Arabia announced it would cut production by another 1 million barrels per day in February and March. On the other hand, Russia and Kazakhstan said they would increase output by 75,000 barrels per day. The Saudi Oil Minister said the cut was a leadership decision to support the Saudi economy, members of OPEC+, and the oil industry as a whole.

Cryptocurrency market surpasses $1 trillion
The total value of the cryptocurrency market surpassed $1 trillion this week as Bitcoin skyrocketed past $40,000 to hit new highs. Bitcoin makes up almost two-thirds of the cryptocurrency market. Some investors are looking to cryptocurrency to hedge against inflation and political risks.

Chinese payment apps to be banned next month
President Trump signed an order banning eight Chinese payment apps. The order will go into effect the last week of February. In reaction to the announcement, the stocks of the companies involved in the ban took a dive. Companies included in the ban are Alipay, Tencent, and WeChat, among others.

Fiat Chrysler-Peugeot merger
Fiat Chrysler and Peugeot signed off on a merger this week, following two years of off and on talks. The combined company will be called Stellantis and will be the world’s fourth-largest carmaker.

Image of the Week

Prediction Consensus: What the Experts See Coming in 2021

Video of the Week

Former Hong Kong legislators arrested
Source: DW