Stock

Enjoyable reality: Goldman Sachs could be very optimistic a few rebound this yr. Except these three issues occur

US stocks started a week of gains on a muted start.

Apple
AAPL,
+ 3.66%,
Tesla
TSLA,
+ 5.63%,
Facebook
FB,
+ 0.65%
and Microsoft
MSFT,
+ 0.91%
are all ready to report their winnings in an action-packed week that includes the Biden administration's first Federal Reserve political meeting. In fact, nearly a quarter of the S&P 500 will report results – with these companies making up 39% of the index by market value, according to FactSet data.

The COVID-19 pandemic and US vaccine rollout remain in focus as President Joe Biden gets to work. Investors will also be keeping a close watch on fourth-quarter US GDP on Thursday. The economists surveyed by MarketWatch expect an increase of 4%. Attention will also be drawn to the recovery in 2021.

In our Call of the day, Goldman Sachs
GS,
-1.99%
Analysts were optimistic about the recovery in the US economy in 2021, but said there were three major risks to the recovery. The investment bank is forecasting growth in gross domestic product of 6.6% this year, which is 2.5 percentage points above the consensus. A reduction in virus risk through mass vaccination and tax support for consumer spending were expected to trigger a “mid-year consumption boom” and “very strong growth” in 2021.

The most serious downside risk, analysts said, has been the threat of a new vaccine-resistant strain of the coronavirus causing COVID-19 and requiring a new vaccine and another round of vaccination. "Virus sensitive spending would likely decrease while a new vaccine is developed, and while a new vaccine could be approved in less than five months, the consumption boom would likely be delayed until 2022," said Goldman analysts, headed by Jan Hatzius. in a note. They added that preliminary evidence suggests that current vaccines, while protecting against the new British strain, are more mixed for the South African variant.

The second most common risk is that viral mutations “significantly raise” the bar for herd immunity, either by being more infectious or by making vaccines less effective. This scenario would also delay the consumption boom. Eventually, even if the introduction of vaccination and warm weather reduce the spread of the virus, there is a risk that consumers will be more cautious than expected, although the downside would be limited, they said.

Fortunately, there were some significant upside risks to Goldman's 6.6% GDP growth forecast, including households rapidly spending the savings accumulated during the COVID-19 pandemic and the impact of other fiscal stimulus in 2021.

The tweet

This Morgan Stanley
MS,
-0.77%
The graph shows the NFIB Small Business Optimism Index, which differs from the Russell 2000
FURROW,
-0.10%
Index, suggesting that while sentiment is turning negative, small-cap stocks are on the up.

The markets

The Dow Jones industrial average
DJIA,
-0.35%
slipped 0.4%, or 164 points, in early trading during the S&P 500
SPX,
+ 0.36%
rose 0.3% and the Nasdaq Composite
COMP,
+ 1.19%
increased by 1.2%. before the open, at the beginning of a busy week of winning. European stocks fell after initially rising on positive gains and reports of acquisitions by online retailer Boohoo
BOO,
+ 5.89%
and ASOS
ASC,
+ 5.93%.
Asian stocks rose overnight in hopes that some economies will recover from the COVID-19 pandemic, with lockdowns easing and vaccine adoption advancing.

The buzz

Biden's top advisors began talks with a group of moderate Republicans and Senate Democrats on Sunday over a $ 1.9 trillion relief package to coronavirus.

According to reports, Biden will reintroduce coronavirus travel restrictions against foreign nationals coming to the US from Brazil, the UK, Ireland and much of Europe on Monday, adding South Africa to the list as well.

The White House on Monday revealed details of the new Buy American Executive Order to be signed by the president. It will increase threshold and price preferences for domestic goods before the government can shop from a non-US supplier.

China overtook the US as the world's number one destination for new foreign direct investment last year, according to US figures released on Sunday.

Just a few days before the fourth quarter result, Baird raised his price target for the electric car manufacturer Tesla
TSLA,
+ 5.63%
from $ 488 to $ 728 per share in a release on Monday that the stock remains upward.

GameStop
GME,
+ 51.65%
Shares rose 42% in premarket trading after rising 51% on Friday. The gains came after the short-selling company Citron Research and speculative buyers organized on Reddit clashed over the video game retailer.

AMC
AMC,
+ 31.25%
The stock rose 34% in premarket trading as the cinema chain raised $ 917 million in equity on debt to weather the COVID-19 crisis.

Random reading

Flaming Lips are holding a unique "Space Bubble" concert.

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