January 20, European stock indexes traded in different directions, in anticipation of the inauguration of Donald Trump as president of the United States, whose victory in November, supported expectations of strong economic growth, due to increased budget spending and tax cuts. Investors are expecting Trump to speak, after swearing in, hoping to hear the details of the economic policy that the new president is going to pursue. During the election campaign, Trump promised to strengthen the middle class and create many jobs, spending billions to repair the country’s aging infrastructure, while pursuing a strict trade policy, as well as tax cuts to stimulate investment. However, recently investors are beginning to express concern that Trump’s plans, against the background of the current high growth rates of the US economy, may lead to a shortage of labor, unsustainable wage increases and too high inflation. Particularly strong inflation can rise in the case of the implementation of the plans of Trump, the introduction of additional duties on imported goods to protect the domestic market. So, Atlanta Fed President Dennis Lockhart believes that during periods when unemployment has fallen too low, one should beware of significant corrections in the economy. In his opinion, uncertainty about how low the unemployment rate could fall could trigger the central bank to make changes in its plans, including in terms of interest rate increases.
Negative data on sales in the UK had a negative impact on the British stock market, sending the FTSE 100 index to the number of laggards. The producer price index (PPI) of Germany, in December rose by 0.4%, compared to the previous month, as analysts had expected. The core UK retail sales index fell by -2.0% in December, compared to the previous month, while analysts predicted a decline of -0.3%. The volume of retail sales in the UK fell by -1.9% in December, compared to the previous month, while analysts predicted a decline of -0.1%. FTSE 100 7.196.52 -11.92 -0.17%. DAX 11,601.29 4.40 0.04%. CAC 40 4,850.54 9.40 0.19%. FTSE MIB 19,588.27 97.31 0.50%. IBEX 35 9.392.30 13.20 0.14%. Stoxx 600 362.81 -0.04 -0.01%.
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