Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
Just as expected, the market has reacted to this news. The S&P futures (INDEXSP: INX) recorded a surge of 0.62% right after the Christmas holiday.
The shares market has gone through a lot in the past few months following the emergence of the Covid-19 pandemic that crippled the global economy and put economic activities to a standstill. The US government then promised to distribute a relief package which triggered the market to react positively for a while.
Unfortunately, the proposal coming into flesh became doubtful as President Donald Trump threatened to avert the bipartisan bill. Despite the ups and downs, Trump has finally signed the bill that will see $2.3 trillion released into the economy with the certain restoration of the employment benefits being awaited by millions.
The pandemic has currently affected over 80 million people globally, and according to Nobuhiko Kuramochi, market strategist at Muzoho securities, the distribution of the relief package will prevent the economy from sinking deep in the first quarter of 2021, and having it before the coming year is good news. Masahiro Ichikawa, Chief Strategist at the Mitsui DS Asset Management stated that the market should be happy that there is a lack of chaos over the stimulus.
“But on the other hand, markets have talked about that stimulus for a long time and I would say most of it has already been priced in,” he said.
Just as expected, the market has reacted to this news. The S&P futures (INDEXSP: INX) recorded a surge of 0.62% right after the Christmas holiday. Nikkei 225 (INDEXNIKKEI: NI225) recorded a 0.74 price surge with the likes of EURO Stoxx 50 futures (INDEXSTOXX: SX5E) rising by 0.42.
The relief package will definitely boost the economy and positively affect commodities led by gold as risk-on trades will increase and cause the dollar to be weaker.
Gold surged by more than 1% to trade at $1,899.7 per ounce. Silver on the other hand traded at $26.62 per ounch after jumping by more than 3%. Deutsche Post AG (ETR: DPW) in Germany had a 3% jump after reacting to the CEO’s statement about finishing the year with a record profit. Saipem SpA (BIT: SPM) in Italy also recorded a positive growth of 1.9% and France’s CAC 40 rose by 0.8%. Despite the significant and a little price gain that spread across the shares market, Alibaba Group Holding Limited (HKG: 9988) recorded a fall in price of about 8% due to the issues with the Chinese regulators after its affiliate Ant Group was ordered to check its business and do some corrections.
The positive run spread across the cryptocurrency market with Bitcoin trading at a record price of $28,288 over the weekend before falling back to a current price of $26,782. Though the gains recorded in most of the markets can be linked to the relief package bill signed, it cannot be refuted that the Covid-19 vaccines finalized and ordered by the UK and the US also brought hope, causing positive feedback from the various markets.