The stock market wants new stimuli since the real economy is bad
European markets open weakly on Tuesday, a very different outlook from yesterday’s highs again for the 3 benchmark indices on Wall Street.
Yesterday, Europe posted moderate gains after Janet Yellen’s support for fiscal stimulus policies, which have given impetus to bets based on economic recovery. “The US Secretary of the Treasury affirmed, despite the bad employment data known last Friday, that the US could regain full employment in 2022 if robust economic stimulus plans are applied,” they highlight in Rent 4.
But the momentum of Yellen and the hopes of US President Joe Biden’s stimulus program do not seem to finish penetrating European markets.
“It seems natural that a tendency to take slightly profits is imposed in the absence of referrals and after the strong rebounds in recent days. However, the market wants to go up and it could do so if some unexpected news helps it ”, comment Bankinter analysts (MC: BKT ).
And it is that the attention is placed, at a political level, on Mario Draghi being able to form a new Government.
The outlook is not bad, according to Link Securities. “The political crisis that Italy is going through, one more, it seems that it can be solved, since everything indicates that Draghi will be able to get enough support to carry out the difficult ‘mission’ that has been entrusted to him.”
“If the second round of negotiations with the main political formations present in the Italian Parliament, currently underway, goes as expected, it is very feasible that between tomorrow Wednesday and Thursday Draghi will announce his Government, which will have to overcome the votes of confidence in the Chamber of Deputies and the Senate ”, these analysts add.
“The resolution of the aforementioned Italian political crisis, a crisis closely linked to the process of distribution of European funds that should be used for the recovery of the country’s economy, one of the worst hit by the pandemic given the structural weaknesses it presented before the The beginning of it will give some peace of mind to the rest of the countries of the Euro Zone, at a time when most of them are also going through an economic and social crisis ”, they conclude in Link Securities.
Furthermore, the markets are once again looking impatiently at the Yellen-Draghi tandem. “The two most powerful ex-governors in the world, leading the Federal Reserve and the European Central Bank during the great financial crisis, know each other well. Their paths cross again, they are back in the same boat, amidst economic crisis and political uncertainties ”, publishes Italy24 News .