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MORNING BID-U.S. stimulus keeps bulls charged

Jan 25 - A look at the day ahead from Danilo Masoni

Optimism that U.S. lawmakers will soon pass a big stimulus package is once again giving a boost to investor morale even as some Republicans are pushing for a smaller package than the $1.9 trillion sought by the Biden administration.

That confidence is more than offsetting ongoing concerns over the COVID-19 pandemic that has hit a grim milestone of 100 million infections worldwide, while signs of delays in delivering vaccines are emerging in Europe and elsewhere.

Illustrating the mood, Asian shares scaled a new all-time peak, while tech bulls pushed Nasdaq futures to a new record peak this morning on hopes that earnings this week from Apple, Microsoft and Facebook could reassert Big Tech’s market dominance.

European stock futures rose but remained below their recent highs as the region kicks off its Q4 reporting season, which is expected to deliver the last quarter of negative earnings growth (-26%) before turning into full recovery mode.

Elsewhere asset prices reflected some angst.

Worries over lockdowns led to a drop in oil prices during Asian hours while safe haven demand helped the U.S. dollar stabilise.

Key developments that should provide more direction to markets on Monday:

* German IFO

* Philips reports 7% increase in Q4 core earnings on high demand for hospital equipment

* Taiwan Semiconductor will prioritise production of auto chips if it is able to further increase capacity

* China was the largest recipient of foreign direct investment in 2020 as the coronavirus outbreak spread across the world

* U.S. corporate events: Kimberley Clark

* US Treasury sells 2-year bills

Reporting by Danilo Masoni

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