Markets push higher as Biden prepares stimulus package
|The impending stimulus package from Joe Biden has helped boost sentiment for global markets today. Meanwhile, airlines are taking off given the reduced competition that comes with the Norwegian Air decision to cut long-haul routes.
- Markets gain ground in anticipation of a Biden stimulus boost
- Unemployment claims surge to four-month high
- Airlines surge as Norwegian Air cut their long-haul routes
Global markets are on the rise as traders look ahead to the long awaited stimulus unveiling from Joe Biden. After months of stimulus-based volatility, today finally sees markets welcome a huge financial package that could top $1.5 trillion. With Biden taking office in less than a weeks’ time, the ongoing damage being dealt by the pandemic provide a critical moment for Biden step in and bring relief for businesses and consumers alike. With Trump having already managed to push through a $600 direct payment, we are looking at a possible further $1400 stimulus check which will likely drive up economic activity. Today’s sharp rise in unemployment claims has provided a timely reminder of the need to help provide financial support, with the initial jobless reading up to the highest figure in over four-months. Nevertheless, while traders have turned their attention to the positives of an impending stimulus package, it makes sense to expect volatility ahead as Trump supporters prepare for a host of armed protests ahead of Biden inauguration.
Airlines are enjoying a welcome boost today, as the news that Norwegian Air is cancelling its long-haul routes ensures lower competition from one of the most aggressive firms in the industry. With Norwegian Air having driven down prices on key routes, their exit will allow competitors to both raise prices and increase their load factor. For now, the fact that Norwegian Air has decided to cut their service in such a dramatic fashion is acting as a positive rather than a warning sign for easyJet, IAG, and TUI shareholders. However, with Norwegian Air having cut their long-haul routes, and Delta Air having halved their cash burn in Q4, it is clear that the industry will need to batten down the hatches as global Covid restrictions continue to stifle revenues.
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