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S & P 500 ends at record high as Wall Street rises

Wall Street climbed, with the S&P 500 closing at a record high, as investors awaited cues from the Federal Reserve amid caution over rising borrowing costs spurred by massive fiscal stimulus.

In a concrete sign that the worst of the damage from the pandemic may be over for the airline industry, Delta Air Lines, Southwest Airlines and JetBlue Airways said leisure bookings were rising. The S&P 1500 airlines index jumped to a one-year high. Other travel-related stocks, including Carnival Corp, Wynn Resorts and MGM Resorts also gained. Most of the 11 major S&P sector indexes rose which are led by utilities and real estate.

The congressional approval of a $1.9 trillion aid bill accelerated demand for stocks. The Russell growth index outperformed the Russell value index in a modest reversal of investors’ recent trend away from technology and other high-growth stocks. Greg Bassuk, CEO of AXS Investments said that with the vaccines and other improving situations in this pandemic they think there will continue to be a fair amount of rotation out of the stay-at-home stocks.

The policymakers are expected to forecast that the U.S. economy will grow in 2021 at its fastest rate in decades while reiterating their dovish stance for the foreseeable future. Wall Street has been roiled in recent weeks by a spike in longer-dated U.S. bond yields due to fears of an increase in inflation. Tesla rose after the company added “Technoking of Tesla” to Chief Executive Elon Musk’s list of official titles.

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Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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