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After last week’s hefty volatility caused by the attack at the capital, this week saw inconsistency as well. However, this was due to the incoming Biden administration’s plans. President-elect Joe Biden unveiled his long-awaited stimulus, COVID-19 and potential tax plans this week. For traders, this proved to be both positive and negative news. On one hand, more stimulus and measures to fight the pandemic were welcomed. On the other, potentially higher taxes and rising interest rates could impact profits and reduce overall gains. With that, traders swapped gains/losses back and forth on the week.
Politics also weighed heavily on the markets. Several technology firms banned President Trump from their platforms citing violence concerns. This pushed many Republicans to call for additional measures in censuring big tech. Elsewhere, the House passed President Trump’s second impeachment and the Senate is set to take up the trial after Biden is inaugurated on January 20.
Data this week was poor as well. While light in terms of the number of releases, several key measures of consumer health pointed to a constrained environment, new upticks in weekly unemployment claims and lower regional manufacturing figures didn’t help either.
Corporate actions were nil as well. With the start of earnings season, deals have slowed to a trickle as they await the new Biden administration’s potential impacts.
All in all, stocks fell on the week after several sessions of gains.
Be sure to check out our previous Wrap here, when the new stocks kept making new records.