Take Five: No.46 enters the White House


FILE PHOTO: Workers place Biden-Harris inauguration banners on the inaugural parade viewing stand across from the White House in Washington, U.S., January 14, 2021. REUTERS/Erin Scott

On Wednesday, Joe Biden will be inaugurated as the 46th president of the United States, taking over the leadership of a country racked by COVID-19, deep socio-economic divisions and facing challenges to its global leadership role.

Biden has proposed $1.9 trillion in stimulus with a commitment for $1,400 stimulus checks. Markets have cheered his win but are watching for clarity on spending and tackling the pandemic.

The S&P 500 has risen in the first 100 calendar days of eight out of the last 10 presidential terms, but Biden’s first 100 days may be more fraught than those of his predecessors. He needs to stimulate the economy quickly, but the slender Democrat majority in Congress means the size and timing of the package remain uncertain.

- Wall Street cheers on Biden stimulus plan but worries about the cost

For a graphic on US stocks - First 100 days:


After 15 years at the helm of Europe’s largest economy, German Chancellor Angela Merkel bows out this year. On Saturday, the Christian Democratic Union picks a new leader, who will likely become chancellor after September elections.

Battling it out are centrist Armin Laschet, arch-conservative Friedrich Merz and foreign policy expert Norbert Roettgen. But Markus Soeder of the CDU’s Bavarian sister party, the Christian Social Union, might well upset the race.

For markets, the candidates’ attitudes to fiscal policy is key. Merkel, known affectionately as ‘Mutti’ or mother, jettisoned her party’s antagonism to deficits, spent more and accepted moving toward joint debt to save the euro zone.

Merkel’s successor probably won’t backtrack completely but concerns linger nonetheless about how quickly Germany might pull back to fiscal orthodoxy under a new leader.

- Kingmaker manoeuvres behind the men vying to succeed Germany's Merkel

For a graphic on Germany economic snapshot:


Economies were meant to be turning the corner in January but when “flash” business activity readings from the euro zone, the United States, Japan and Britain emerge on Friday - the first PMIs of 2021 - they may be more sombre than anticipated.

While economic rebound bets still stand, activity curbs and a surging COVID-19 caseload are casting doubt over forecasts.

Having bounced off March troughs, global PMIs have seesawed of late just above 50. Economists expect IHS Markit’s flash Purchasing Managers’ Index (PMI) to show euro zone activity shrinking further after December’s contraction. PMI readings above 50 indicate growth and U.S. and UK surveys showed strong expansion last month, but the big question is whether that continues.

We get a snapshot from China too. Data should show 2.1% economic expansion last year while December industrial and retail figures will provide a more up-to-date picture of growth.

- Euro zone contraction deeper than thought in Dec but optimism rose

- China's GDP growth seen recovering to 8.4% in 2021, slowing to 5.5% in 2022

For a graphic on World economic recovery stalling?:


The European Central Bank meets on Thursday. It unleashed extra stimulus a month ago but the new COVID-19 strain and a relatively slow vaccination pace are again clouding the economic outlook.

Cause for concern? Not so, comments from Christine Lagarde suggest. The ECB chief predicts recovery as COVID subsides, seeing the glass as half-full, not half-empty. Germany’s economy too is cause for optimism, shrinking by a less-than-expected 5% in 2020.

But prolonged lockdowns will hurt. Against this backdrop, markets will want the ECB to signal its commitment to using the full firepower of its 1.85 trillion-euro ($2.24 trillion)emergency bond-buying scheme - something on which policymakers appear to be split.

- ECB's Lagarde pushes back on gloomy forecasts, sticks to recovery outlook

For a graphic on Renewed surge in COVID-19 cases in Europe:


In late 2020, New York bustled with initial public offerings from the likes of Airbnb and Doordash in eye-popping valuations and soaring values on their first trading day.

Now Europe is playing catch-up, with several IPOs already off the blocks in January. Bootmaker Dr. Martens kicked off proceedings, followed by online card retailer Moonpig, Poland’s InPost and Germany’s Auto1.

And as 2020 earnings emerge and the equity rally continues, more companies are seen making a bid for listings; among them are Deliveroo, pet care firm IVC Evidensia and German online fashion retailer About You.

- European tech firms seek to share in U.S. IPO bonanza

For a graphic on Global ECM fees:

Reporting by Ira Iosebashvili in New York, Karin Strohecker, Tommy Wilkes, Dhara Ranasinghe and Abhinav Ramnarayan in London; compiled by Sujata Rao; editing by Susan Fenton