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By Noreen Burke
Investing.com -- Politics will continue to dominate the headlines in the week ahead amid calls for President Donald Trump’s removal from office after he encouraged a mob of his supporters to storm the U.S. Capitol.
But investors will likely be focusing more on the prospects for a bigger stimulus package after Friday’s employment report showed the U.S. economy shed jobs for the first time in eight months in December amid a resurgence of Covid-19 infections. Concerns that the vaccine rollout is going too slowly could give stock markets pause.
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Market participants will get a snapshot of how the economy is performing with the release of data on inflation and retail sales. Investors will also get to hear from several Federal Reserve speakers, including Chair Jerome Powell. And earnings season will get underway with big banks set to release fourth quarter earnings results on Friday. Here’s what you need to know to start your week.
Political developments
Democratic-led efforts to impeach Trump for a second time gained momentum over the weekend, but it remained unclear whether enough Republicans would support the move so close to the end of his term.
Meanwhile, CNN reported late Saturday that Vice President Mike Pence had still not ruled out invoking the 25th Amendment, which allows for stripping the powers from a president unable to fulfill the duties of the office.
If found guilty after leaving office, Trump would still lose benefits enjoyed by ex-presidents, such as security and pension, and he would be barred from running for a second term. But a Senate conviction requires a two-third majority, which would take at least 17 Republican votes.
Since losing the Nov. 3 election, Trump has falsely claimed he was the victim of widespread fraud.
Stimulus hopes
Last week’s results of the Georgia Senate runoffs mean that Democrats will now have a majority in both the Senate and the House. That gives investors more clarity on fiscal policies that will likely be advanced in 2021, namely, President-elect Joe Biden’s proposals for increased fiscal stimulus and higher taxes.
Stocks closed at record highs on Friday, despite data showing the U.S. economy suffered its first net loss of jobs in eight months in December, after Biden said his economic relief package will be in the trillions of dollars.
Biden said his administration's economic package will also include unemployment insurance and rent forbearance. The package is due to be unveiled on Thursday.
Larger amounts of stimulus are expected to cushion the impact of the surging virus on the economy. The U.S. reported over 4,000 deaths from Covid-19 in one day for the first time on Friday.