TRANSCRIPT: Market Update [feb’21] – Will the 1.9 trillion relief help?

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Hi everyone and welcome to our market review.

So, February was an interesting month as we saw our first pullback in the technology sector for quite a while, we also saw China come out with some interesting data regarding their GDP growth. The COVID vaccine and hopes for the economy and the big news of course is the 1.9 trillion-dollar relief package.

So, let us get started with some market data in recent days the S&P 500 has marginally sold off, but with the index is still up roughly 75 percent from the market bottom that we saw hit nearly a year ago, some on the street are starting to get a little bit antsy.

The NASDAQ which is the technology index composite pulled back eight percent before a Friday rebound the S&P is now at about 200 or above its 200-day moving average causing some to think that a small correction could be due.

However, that might be just a pullback before the stimulus money comes in which is expected to pass soon, giving a strong bull run for the market in the past 12 months a small pullback is certainly to be expected and should not be a major concern in and of itself.

Going over to Asian news China’s economy surged closer to the American benchmark last year achieving nominal gross domestic product or GDP of 14.73 trillion USD which is more than 70 percent of that of the us this data comes out of the national bureau of statistics in Beijing the Asian country’s economy grew at three percent in dollar terms during 2020 topping for the first time more than 100 trillion won for the first time in a year

So, that leads some people to be asking you know what the cause of this might be. Leading economists seem to think that it is the actions to suppress the coronavirus outbreak in the early part of last year, helped the industrial production of China. A stage in early recovery in spring which also then had the actions of fuelling a real estate development and other economic activity overseas demand for Chinese goods also gave a boost you know masks and things of the like.

In contrast the US struggled with its initial response to the pandemic which is hampering the economy nominal GDP in the US shrank 2.3% last year in contrast to the pandemic response suggests China overtake the us as a top global economic power sooner than expected.

The Japan centre for economic research projected in December last year 2020 that china would surpass the US in nominal GDP as soon as 2028 which is only seven years away.

Now across the pond for some UK news some incredibly positive data coming out of the UK with over 20 million people now receiving a dose of the COVID vaccine the rapid pace of the UK’s vaccine rollout is lifting hopes after a year of you know extended lock-downs in the UK, chaotic separation from the EU and one of the highest per capita death tolls in the world.

Last Thursday the Bank of England (BOE) projected that long-term optimism for the country’s economic recovery saying that GDP is expected to recover rapidly towards pre-covert levels even um over the course of this year so 2021

They are really pinning their hopes and recovery for this year as the vaccination program led to a easing of restrictions in the country. As well the BOE, the Bank of England’s forecast they went as far as the rare upbeat sentiment. Among the analysts over the past week regarding the UK’s prospects this was largely owing to the speed of the roll-out and also the fact that the UK has its own vaccination, this was far quicker than that of the EU which has really struggled to ramp up the pace of vaccinations, so that means that at the moment currently one-third of the British population has received at least one dose and that is according to Bloomberg’s vaccine tracker.

The government did actually go against medical recommendations to delay to actually push back the second dose which turned out to work in their favour as well.

So, now on the big news our last Saturday we saw an announcement of a 1.9 trillion-dollar relief package from the US house of representatives this is a big milestone on the way to securing congressional approval for the economic stimulus bill, so the house passed a proposal, and this included things such as $1400 direct payments another 350 billion for state and local governments an extension of the federal top-ups to unemployment insurance.

Early on Saturday morning with the support of democratic lawmakers, now this did not include the $15 minimum raise that some people were looking for.

President Biden pleaded for quick action from the senate, stimulus bill having come out last Saturday saying, “we have no time to waste, if we act now decisively quickly boldly, we can finally get ahead of the virus we can finally get our economy moving again and the people of this country have suffered far too much for too long, we need to relieve that suffering”, was his statement that he made last Saturday.

So, since then from that news coming out on Monday, we have seen some global markets respond positively to the news looking at Japan’s NIKKEI index that rallied two percent while in America the NASDAQ futures which is before the market opens bounced 0.8 percent and the S&P futures up 0.7%

Okay guys, that is it for February’s Market Wrap Up.

Thank you very much for watching and I hope you enjoyed this quick video, as always this is not to be taken as investment advice this is purely for education. If you are looking to get your finances in order, please speak to a professional.

Thanks guys have a good day and I hope your March is a good one.


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