- Weekly global market focus
- Biden says aid package will be trillions but Manchin says “no way” to $2,000 stimulus checks
- U.S. political uncertainty continues with possible House impeachment vote
- Post-holiday pandemic surge sparks record high in U.S. infections and death
Weekly global market focus — The markets this week will focus on (1) U.S. political uncertainty with a possible impeachment vote in the House and with next Wednesday’s approaching Inauguration Day, (2) the post-holiday pandemic surge and the extent to which the more transmissible Covid variant is circulating in the U.S., (3) expectations for President-Elect Biden this week to outline his stimulus plans, and (4) this week’s $120 billion sale of 3-year, 10-year, and 30-year Treasury securities.
In Europe, the focus will be on the economic damage being caused by the pandemic surge. In Asia, the focus will be on whether President Trump announces any more actions against the Chinese government or Chinese companies during his remaining days in office.
Biden says aid package will be trillions but Manchin says “no way” to $2,000 stimulus checks — Although Democrats will have control of the Senate after next Wednesday’s Inauguration Day, Democratic West Virginia Senator Manchin may play the spoiler. Democrats will need the vote every one of their 50 Senators, which means that Mr. Manchin has the power to make or break any Democratic initiatives.
Mr. Manchin has already said that he would not support eliminating the Senator filibuster rule. That would hamstring Democrats since they would only be able to pass budget-related bills through the Senate with the budget reconciliation process, which requires only a majority vote. Republicans would be able to filibuster all other legislation.
Also, Mr. Manchin on Friday said “absolutely not” to providing $2,000 stimulus checks since he said money should be more targeted to those in need and that the focus should be on vaccination. However, Mr. Manchin over the weekend backtracked somewhat and would not say whether he supports $2,000 stimulus checks.
President-Elect Biden said last Friday after the poor payroll report that he will propose trillions in aid. Mr. Biden said he will release his aid proposal this Thursday, before he takes office next Wednesday.
U.S. political uncertainty continues with possible House impeachment vote — Democratic control of the Senate was cemented when both Republican candidates last Friday conceded their losses to the Democratic candidates for last Tuesday’s Georgia Senate seat elections. There apparently won’t be any recounts or lawsuits. The deadline for certification of the Georgia Senate seat winners is January 22. Democrats will take control of the Senate either next Wednesday when Kamala Harris becomes Vice President, or a day or two later if the two new Georgia Senators are not seated in the Senate until January 21 or 22.
There will be plenty of room for strife in the Senate after January 20 since the seats will be tied at 50-50. Even though VP Harris will carry the tie-breaking vote, Republicans will want a power-sharing agreement such as the one in 2001 that was reached between Leaders Trent Lott and Tom Daschle when there was a 50-50 Senate seat tie and Dick Cheney was the VP. At a minimum, Leader McConnell will have more room to slow down the Democratic agenda.
Meanwhile, House Speaker Pelosi seems to be moving towards an impeachment vote for President Trump for this week. Even if Mr. Trump is impeached again this week, there isn’t enough time for Mitch McConnell to hold a trial in the Senate since the Senate is on recess until next Tuesday.
If there is an impeachment vote this week, Speaker Pelosi will likely delay sending the impeachment referral to the Senate until after January 20, when Democrats will be in control of the Senate. House Majority Whip James Clyburn (D-SC) suggested on Sunday that the House might delay sending the impeachment referral to the Senate by at least 100 days so that President-Elect Biden has time to get his cabinet confirmed and launch his most important legislative initiatives.
The Democrats’ intent, if they were to start a trial in the Senate, would be to first get the two-thirds vote in favor of conviction. Then they would proceed to the second and more germane punishment vote of disqualifying Mr. Trump from holding federal public office again. The second vote to disqualify Mr. Trump from ever being president again would require only a majority vote.
In any case, the markets will be carefully watching Mr. Trump during his remaining nine days in office for any executive orders, pardons, or other actions. The markets will also be nervous about whether there will be any violent protest moves in the coming days or a disruption of next Wednesday’s Inauguration of Joe Biden.
Post-holiday pandemic surge sparks record high in U.S. infections and deaths — The 7-day average of U.S. new Covid infections reached a new record high of 254,517 on Saturday, according to data compiled by Bloomberg. The 7-day average of Covid-related deaths on Saturday reached a record high of 3,177. Observers have been expecting a surge in the pandemic statistics in January following holiday gatherings and travel.
The U.S. vaccination pace remains slow, with 8.02 million vaccine doses administered so far, which is far less than the previous target of 20 million by the end of 2020, according to Bloomberg. Only 272,429 people have completed the two-dose vaccination regime, according to Bloomberg. Only 2.4% of the U.S. population has received a vaccine dose so far. Also, states have only administered 36% of the shots that they have received, illustrating that there is a serious bottleneck at the state level of administering the shots.
