Stocks rise, dollar extends losses on Biden win By Reuters

By Swati Pandey

SYDNEY (Reuters) – Wall Street equity futures got off to a strong start on Monday, as the dollar continued its downtrend as risky assets were boosted by expectations of fewer regulatory changes and more monetary stimulus under US President-elect Joe Biden.

The Democratic candidate’s victory in the US presidential election was widely reflected by the markets, which had negotiated with the prospect of a Biden presidency and a Republican-controlled US Senate late last week.

E-mini futures for the S&P 500 jumped 0.6% on Monday, signaling a positive start for US markets.

The largest MSCI index of Asia-Pacific equities outside of Japan edged up 0.1%, after climbing 6.2% last week to record its best weekly performance since early June.

“What appears to be divided government at this point offers more continuity in the current environment rather than the potential for far-reaching change,” said Jim Wilding, wealth manager at Confluence Financial Partners in Pennsylvania.

“We see this as a net positive for the stock markets, especially in this scenario as it puts the odds of a very low tax hike in the years to come,” he added.

Wilding added a word of warning with the S&P 500 not far from all-time highs.

“As we remain positive on the medium-term outlook and believe that a divided government reduces the chances of a bear scenario playing out, we will refrain from the unbridled enthusiasm at current levels,” Wilding said. .

Stocks rebounded strongly last week, with the S & P500 rising 7.3%, recording the best gains in an election week since 1932, according to National Australia Bank (OTC 🙂 analyst Tapas Strickland.

Matt Sherwood of Australian fund manager Perpetual, however, said Biden’s victory did not necessarily justify a change in his portfolio.

“At the end of the day, we think the US economy is still quite fragile and that growth is slowing,” Sherwood said.

“You could potentially attract your portfolio more to higher beta-type markets, such as emerging markets, and there is potential for better prospects in energy than would have been the case with a sweep. own democrat. “

Analysts have also warned the road could get tougher from here, with investors focusing on Biden’s ability to expand fiscal stimulus and reduce the spread of COVID-19.

The United States has seen a record number of new coronavirus infections last week, with the total number of cases approaching 10 million.

A fiscal stimulus package is still possible despite a divided government, analysts say, although a larger package is less likely. This highlights the US Federal Reserve to do more to support the world’s largest economy.

As a result, the dollar has weakened in recent days as growth indicators such as the Australian dollar have rallied with Biden’s presidency deemed less likely to face trade.

The dollar was a bit weaker against the Japanese yen at 103.25, after slipping about 1.3% last week.

The was up 0.3%, after jumping 3.3% last week.

Investors will also be focusing on the British Pound and the Euro this week, with trade talks between the UK and the EU culminating in the EU summit on November 15.

Later today, the Chief Economist of the Bank of England will deliver a speech on ‘The economic impact of the coronavirus and its long-term implications for the UK’.

The euro, which climbed 1.9% last week, was a little higher on Monday at $ 1.1887. Sterling was a shade lower at $ 1.3146.

That left 0.1%.

In commodities, oil prices edged up after losses on Friday, but remained below $ 40 a barrel as rising coronavirus cases around the world fueled fears of lackluster demand.

Gold rallied, with spot prices rising 0.36% to 1,958.7 an ounce.