Markets express doubts towards Biden's plan and open with declines

January 15, 2021 15:00

European stocks indices opened the trading day in the red, posting losses between 0.5% and 1%, with similar numbers anticipated in Wall Street futures. It seems that the stimulus plan announced yesterday by president-elect Joe Biden generated some doubts in the markets, despite the fact that it meets expectations of an additional 1.9 trillion dollars in aid. 

The main question is how Biden is going to achieve the objectives reflected in the plan, taking into account that some of them require a majority in the Senate that the Democrats may not have, for example, the aid promised to states or the vaccination plan. Another issue which arouses suspicions is the fact that the plan triggers debt, considering that it joins another stimulus package approved by Congress, totalling 900,000 million dollars, and the 2.2 trillion package from last March. This debt could be reduced through tax increases, or through the tools afforded to the Fed.

In the middle of the European trading day, falls began to be more pronounced, especially in the French CAC 40 index, with a decline of 1.3%. Yesterday, the French government announced new restrictions on mobility in order to curb coronavirus infections, which has also worried investors.

Source: Admiral Markets MetaTrader 5. CAC40 weekly chart. Data range: from June 7, 2015 to January 15, 2021. Prepared on January 15, 2021 at 1:30 p.m. CET. Keep in mind that past returns do not guarantee future returns.

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