January 11th, 2021
Stocks fell to start the week. The Dow dropped 0.4%, S&P 500 dropped 0.6%, and NASDAQ dropped 1.2%. Technology stocks were hit the hardest. Twitter dropped 7% during the first hour of trading and Facebook dropped 3% during the same time period.
Trump is Removered from Twitter
Many conservatives said the move to remove Trump from Twitter went too far (Bloomberg, 2021). Google and Apple removed the app Parler, which was popular with Trump supporters from their stores, citing incendiary speech from Trump and his allies. Twitter stock is expected to decline, now that Trump is banned from using it. Trump is looking to revoke Section 230, “a liability waiver that social media companies depend upon to allow relatively unfettered speech on their platforms.”(Bloomberg)
January 12th, 2021
Stocks are largely flat. The Dow, and S&P 500 fell less than 1% and later regained less than 1%. However, NASDAQ rose a bit less than 1%.
Distribution of Vaccines
The Trump administration is releasing second doses of coronavirus vaccines that had been held back for booster shots and is urging states to administer them to people over 65 and people with health conditions (WSJ, 2021). Out of the 25.4 million shots prepared, only 8.9 million Americans have received it. The Chinese COVID vaccine is revealed by Brazilian researchers to be 50.38% effective, a full 30 percentage points lower than expected. Perhaps Moderna could take advantage of this study and distribute vaccines to countries that had received the less effective Chinese vaccine.
January 13th, 2021
US stocks continue to be relatively flat for a second day, with each of the market indicators changing by less than 1%. The biggest gainers were Airbnb, rising 6%, and Zoom Video, rising 7%. Airbnb plans to cancel future reservations in the DC area for Joe Biden’s inauguration. Zoom Video has a strong performance due to the rising COVID deaths, forcing people to work from home. The US reported its highest number of COVID deaths on Tuesday with more than 4,320 fatalities. Deaths averaged 3,300 every day this past week, a 217% jump from mid-November.(CNN, 2021) This situation would only help Zoom’s stock prices.
House Impeaches Trump Again
The House of Representatives is set to vote to impeach Donald Trump for a second time, with 10 Republicans supporting them. This is the first time ever in American history that a president was impeached twice. They will impeach him on allegations that he encouraged a mob to storm the US Capitol as part of an effort to overturn Biden’s win. (WSJ, 2021) Ultimately, the House voted to impeach Trump with a 232 to 197 majority, and 10 Republican congressmen supported the impeachment. The Senate must now weigh the conviction.
January 14th, 2021
The Dow rose over 100 points, or 0.36% and ended up falling 0.22% to end the day. Nasdaq Composite rose 0.7% to reach an all-time high and fell 0.12% at the end of the day. The initial optimism was caused by Joe Biden’s stimulus plan, which will include additional $1,400 direct payments, an extension of increased unemployment insurance, and support for state and local governments. (CNBC) The stimulus could be as big as $2 trillion. Stocks have relatively stable earnings, despite worse than expected job losses – 965,000 Americans filed for first-time unemployment insurance, far more than the forecasted 812,000. (Barron’s, 2021) Biden plans to raise corporate taxes, but airline and travel companies are largely protected by the Cares act, which gives them tax breaks. Tech shares declined later this day, dragging the market downwards.
January 15th, 2021
The Dow fell more than 100 points or 0.4% lower. JPMorgan Chase and led the market lower, despite posting better than a better than expected earnings report. A similar situation occurred for Wells Fargo and Citigroup, which declined 7.3% and 4.5% respectively. Retail sales fell 0.7%.
Joe Biden’s Stimulus Plan
Joe Biden’s $1.9 trillion stimulus plan includes proposals to send $1400 checks to millions of American households, raise the federal minimum wage to $15 per hour from $7.25, and expand unemployment benefits. The package will devote $400 billion to speed Covid-19 vaccinations and school reopenings and about $440 billion mainly to aid small businesses. Biden intends to introduce further plans to combat climate change and improve infrastructure (Bloomberg). Under Biden’s policy, speeding up vaccinations would be the quickest way to improve the economy, as more businesses would reopen and there would be more in-person sales. The distribution of stimulus checks may be inefficient because there is no effective way to gauge who needs the checks the most and whether the checks reach people who need the money instead of people who will simply save it. In the long term, green energy firms would experience greater profits, as Biden intends to invest in them and sustainable infrastructure will be more economically feasible than before. However, Biden has to bank on high economic growth, which is quite uncertain, during his term to be able to afford being in debt due to increased spending.