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Optimism about the end of the pandemic and support from governments and central banks have rescued the Trump stock market. Now, investors will see if those gains can hold under Joe Biden, who will be sworn in as the 46th president of the United States on Wednesday.

A look back: Shares shot up after Trump’s 2017 tax cuts supercharged corporate earnings, then plunged at record speed when Covid-19 began battering the United States. Since then, however, they’ve been rocketing higher, repeatedly reaching all-time highs. Deep political polarization and a worsening pandemic have not been enough to hold Wall Street back.

Despite this sharp rally, stocks under President Donald Trump have not performed as well as they did during the first terms of Presidents Bill Clinton or Barack Obama, according to an analysis by my CNN Business colleagues Matt Egan, Annalyn Kurtz and Tal Yellin.

And some of the recent increases can be attributed to Biden’s win, which investors believe will generate substantial government spending to boost the economy. Stocks have gained about 13% since Election Day as of Tuesday — the best post-election market performance for a new president in modern history, according to CFRA Research.

Biden has not put as much emphasis as Trump on stocks as a gauge of the country’s strength or wellbeing.

“The idea that the stock market is booming is his only measure of what’s happening,” Biden said of Trump in the final presidential debate in October. “Where I come from in Scranton and Claymont, the people don’t live off of the stock market.” (Per the latest Gallup poll, 55% of Americans have some exposure to the stock market, many through retirement accounts.)

Even so, Wall Street will be watching to see if market momentum can be maintained. Chatter has increased in recent weeks that corporate valuations, particularly in the tech sector, have jumped too high.

“Many investors worry that the equity market has rebounded too far and too fast and that there are signs of excess starting to emerge in parts of the financial system,” Peter Oppenheimer, Goldman Sachs’ chief global equity strategist, told clients this week. “This is a reasonable concern given that the rebound in equities since the bear market trough in March of last year has been remarkable.”

Oppenheimer said that while a correction — or a 10% decline in stocks from their recent peak — looks “increasingly likely,” the odds that stocks will enter a new bear market, dropping 20% from recent highs, in the next year appear “fairly low.”

He points to expectations of strong global economic growth in 2021 as the pandemic eases, as well as “unprecedented” policy support.

On that front, however, unknowns remain. While Federal Reserve Chair Jerome Powell has emphasized that interest rates could remain at historic lows for the foreseeable future, the fate of Biden’s $1.9 trillion stimulus package will rely on his ability to generate some Republican support. In a divided Washington, that will be no easy task.

Netflix comes of age as it hits 200 million subscribers

Netflix (NFLX) has come a long way since it launched in 1997 to send customers DVDs in the mail.

The latest: The streaming service told investors on Tuesday that it now has more than 200 million subscribers globally, after adding 8.5 million in the fourth quarter of 2020 — beating its own expectations.

It wasn’t the only sign that Netflix has developed into a mature player in Hollywood and on Wall Street.

The company also said that it will no longer need to borrow money to finance day-to-day operations, and that it will explore returning cash to shareholders through stock buybacks.

Investor insight: Shares are up 13% in premarket trading, teeing them up to hit an all time high on Wednesday.

Competition in the streaming market remains fierce, of course. ViacomCBS’ newly rebranded streaming service, Paramount+, will go live in early March, the company said Tuesday — joining an increasingly crowded field that also includes Disney+, Apple TV+, Amazon Prime Video, Comcast’s Peacock, AT&T’s HBO Max, and more.

But investors think Netflix appears to be in a good position to maintain its spot at the front of the pack. UBS, for example, upgraded the company’s shares to a “buy” rating after it posted earnings, citing continued strong global subscriber growth “even [against] rising competition [and] robust growth” in the first half of 2020.

Rich Greenfield of LightShed Partners pointed out on Twitter that while investors previously seemed worried about how Netflix was going to finance its massive content production machine, the tone has shifted.

The question now, he says: “What are you going to do with all the cash you will start generating in 2022 and beyond?”

Janet Yellen previews Biden’s tough stance on China

Janet Yellen, President-elect Joe Biden’s nominee to lead the Treasury Department, has made clear the incoming administration will maintain a tough approach to dealing with China — setting the stage for prolonged tensions between the world’s two biggest economies.

Testifying before the Senate Finance Committee on Tuesday, Yellen promised to take on “China’s abusive, unfair and illegal practices.”

“China is undercutting American companies by dumping products, erecting trade barriers and giving away subsidies to corporations,” she said.

Yellen added that while the Biden team would work with US allies, as opposed to acting unilaterally, she is prepared to use the “full array of tools” to address such concerns. Biden has said that he will not quickly eliminate Trump-era tariffs on Chinese goods.

The stance was echoed by Antony Blinken, Biden’s nominee to lead the State Department, in his comments Tuesday before the Senate Foreign Relations Committee.

“President Trump was right in taking a tougher approach to China,” Blinken said. “I disagree, very much, with the way that he went about it in a number of areas, but the basic principle was the right one.”

What it means: The battle between the United States and China on trade and technology has been a key source of uncertainty for investors over the past four years. Under Biden, that’s not going away.

Up next

Joe Biden will be sworn in as the next president of the United States at 12 p.m. ET.

Also today: BNY Mellon, Morgan Stanley (MS), Procter & Gamble (PG) and UnitedHealth (UNH) report earnings before US markets open. Alcoa (AA) and United Airlines (UAL) follow after the close.

Coming tomorrow: Economists expect another 910,000 first-time claims for unemployment benefits, a sign of US labor market weakness.