Testimony of Janet Yellen
Jane Yellen, Joe Biden’s US Presidential nominee, spoke at the Treasury Department. Its plan is for them to act on a large scale in the next package of coronavirus mitigation measures, but the benefits outweigh the costs of higher debt burdens. If elected finance minister, her finances would be to help Americans overcome the last months of the pandemic and rebuild the U.S. economy to bring more prosperity to more people and ensure American workers can compete in an increasingly competitive global economy.
“Neither the elected president nor I am proposing this rescue package without increasing the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act,” says Yellen.
Janet Yellen also addressed the Treasury’s stance on the dollar after President Donald Trump often demanded a weaker dollar to support US exports.
New electric vehicle startup
Startup Rivian, supported by Amazon and Ford, plans to launch an electric pickup and SUV. The company has increased its capitalization by $8 billion since the beginning of 2019. It currently plans to launch another $2.65 billion investment round. Rivian, with the most recent investment mentioned, is $27.6 billion.
“This is a critical year for us to launch the R1T (pickup), R1S (SUV) and Amazon commercial vehicles,” said Rivian R.J. Scaringe. “The support and trust of our investors allow us to continue to focus on these launches while expanding our business in the next phase of growth,” he added.
Amazon has already ordered 100,000 electrical supplies at its Illinois plant by the end of 2021, with all deliveries to be completed by 2024.
Car sales in the EU fell sharply
The European Automobile Manufacturers Association (ACEA) said car sales fell by a record 23.7 per cent to 9.94 million vehicles due to the pandemic. Percentage declines in euro area countries were double-digit. The most significant declines were recorded in Spain (-32.3 per cent), Italy (-27.9 per cent) and France (-25.5 per cent). Germany reported a 19.1 per cent drop in new car registrations.
In December, sales of new passenger cars in the EU fell by 3.3 per cent year on year to 1.03 million cars. There were declines in France (-14.9 per cent) and Spain (-11.8 per cent). On the other hand, Germany recorded an increase of 9.9 per cent. In Spain, about the same number of cars were registered year-on-year as a year ago.
The oil price has risen
Thanks to the established fiscal and monetary policy, expected demand in North America has increased, which is reflected in the price of oil. OPEC Secretary-General Mohammed Barkindo said at the same conference that “We all agree that the recovery is fragile, there is still more uncertainty, but we are cautiously optimistic that the recovery will take place this year.”
Performance Brent oil futures (Source of the graph: Tradingview)
Bank of America expects growth of loans
After lending fell by 6% in 2020, the bank provided a positive outlook for 2021. During the crisis, large companies relied on capital market financing rather than spending less than they saved on the bank and household loans. The fiscal stimulus had a negative impact on credit demand.
Performance of Bank of America’s shares (Source of the graph: Tradingview)
Watch this week:
Thursday, January 21, 2021
New Zealand will publish a consumer price index in the fourth quarter. 0.1% growth is expected on a quarter-on-quarter basis.
Friday, January 22, 2021
The US will announce the sale of built houses in December. Analysts expect 6.55 million.
The euro area will publish the manufacturing PMI index. A decrease from 55.2 to 54.5 points is expected.
Source of the text: Investing, Zerohedge, Financial Times, Reuters, Tradingview