European markets are trading higher today despite a massive global stock market rally. Investors know that in the medium term, there are still vast challenges and issues which need serious attention. Yes, vaccines have answered many questions, and we are in a much better situation today compared to the beginning of this year. But, this does not change the fact that it is going to be a fair amount of time before things get back on track. This means that optimism spurred by vaccine and political development maybe a little too much, and the reality is that the path to recovery is still full of obstacles.
Having said that, looking at all the fundamentals, investors are very optimistic as there is no major threat on their dashboard, which could derail the stock market rally or economic recovery. This is one of the reasons that we have seen new record highs for the Dow Jones Industrial Average and Russell 2000 posting their gains.
European banks are likely to be in the spotlight again today as the ECB confirmed that the banks would be paying dividends from next year. Lenders will not be questioned for paying a dividend as long as they can convince that they hold healthy balance sheets. This is likely to push the banking stocks higher again.
There is no doubt that the month of November is turning out to be another stellar month for the equity markets and the crypto market, which is literally full of hype now. XRP touched its highest price level against the dollar in nearly two years, and the gate is wide open for XRP to go beyond the one dollar mark. This is certainly fascinating news because now the door is wide open for the XRP token to cross above the $1 price level. For the record, the token has more than doubled in less than a week. As for the Bitcoin price, traders are now waiting for the crypto king to break above the all-time high. So far, the price is continuously consolidating, and at the same time, it is moving higher as well.
As for the US, the current US Treasury Secretary, Steven Mnuchin, is making matters a little tricky for his successor, Janet Yellen, the former Fed Chairwoman. Mnuchin is going to put $455 billion in Cares Act funding, which means that Yellen will no longer have access to that cash, and she will need approval from Congress to access it. The Fed uses the funds for emergency-lending facilities—basically to keep the market away from any liquidity issues. The move is being seen by the markets as the Trump administration is not making the power transmission process smooth and making sure that people coming into the White House have no leverage or advantage over the previous administration.
Over in the UK, all eyes will be on the Chancellor of Exchequer, Rishi Sunak, who is set to announce 4.3 billion of new funding to support the UK economy. The potential funding is going to target the rising unemployment level, and the purpose is to get the unemployed back to work. Nearly 2.9 billion out of 4.3 billion pounds will target those programs that can help people find new jobs and 1.4 billion to enlarge employment center size. The Chancellor will assure lawmakers and the public that his top priority is to save jobs and get people back to work.