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Germany’s main stock market barometer hit an all-time high on Monday amid sharply rising stocks following US President Donald Trump accepted late sign a bill to inject $ 900 billion in stimulus measures into the world’s largest economy.
In early trading, the German Dax climbed 1.3%, leaving it above the record high recorded in February, before the pandemic triggered a sharp drop in global stock markets. The index has climbed more than two-thirds since its low in March.
German markets were closed on Christmas Eve, unlike those in Paris and London, so Monday also provided investors with the first chance to respond to the EU-UK Brexit trade deal. -Us last week.
Other European markets also rose on Monday, with the continent-wide Stoxx 600 up 0.5% and the CAC 40 in France rising 0.6%. Wall Street’s S&P 500 index rose 0.5%. UK markets have been closed for a public holiday.
Mr Trump shocked many lawmakers last week by rejecting the $ 2.3 billion legislation, which, in addition to stimulus measures, also included funding to keep the government open until the end of September next and avoid a closure that was to start after midnight Monday. .
Steven Mnuchin, Secretary of the US Treasury, had negotiated the bill with lawmakers, but Mr. Trump initially refused to sign it into law. The president has asked Congress to increase direct payment checks sent to Americans from $ 600 to $ 2,000 per person. Mr Trump said on Sunday night that he still plans to push for the increase.
Despite the delay, Goldman Sachs economists said the stimulus was about $ 200 billion higher than expected and accounted for about 4 percent of U.S. economic output. The Bank of Wall Street now expects the US economy to grow at an annualized rate of 5% in the first quarter of next year, down from 3% previously.
“The new path involves significantly higher production levels over the four quarters and elevates 2021 annual growth to 5.8%,” Goldman said.
The British pound edged up 0.1% against the dollar on Monday to $ 1.3566, although the pound still remains shy of the 2020 high of $ 1.3624 reached on December 17.
Investors said the Brexit trade deal removed one of the main points of uncertainty hanging over the currency, but important work remains to be done as it does not cover key industries, such than financial services.
“Although this is one of the most difficult outcomes of Brexit, it allows both sides to establish a cooperative platform and potentially enable improvements,” said Christian Keller, head of research economist at Barclays.
Mr. Keller added, however, that the British bank remained “cautious for the coming month as acrimonious negotiations have probably resulted in deep diplomatic scars on both sides of the chain”.
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