US stocks are heading to record highs again after Trump concedes defeat and investor position for more stimulus

• U.S. stocks were set to hit record highs again on Friday as futures prices rose after President Donald Trump recognized that Joe Biden would become president in less than two weeks.
• Democrats pledged to launch more relief against economic coronaviruses, stepping up actions across the board at a large-scale rally.
• Yields on longer-dated US Treasuries have continued to rise as the market anticipates higher issuance and stronger growth and inflation.
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U.S. stocks were expected to continue their remarkable rally at the opening bell on Friday, as indicated by futures prices, after President Donald Trump conceded defeat in the 2020 election and investors positioned themselves for more economic relief from from President-elect Joe Biden and a Democratic-controlled party. Congress.

Traders continued to sell government bonds and turn to stocks, pushing stocks higher in Asia but gold lower. Chinese stocks, however, ended a six-day streak in a row amid new tensions with the United States.

Investors have been racking up shares in recent days with the expansion of the vaccine rollout and the Democrats’ takeover of the U.S. Senate via two second-round wins in Georgia.

Even unprecedented scenes of pro-Trump rioters storming the U.S. Capitol could not deter the rally, which propelled the S&P 500, Dow Jones Industrial Average, Nasdaq and Russell 2000 to record levels.

S&P 500 futures rose 0.22% on Friday, while Dow futures rose 0.23% and Nasdaq futures gained 0.32%.

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“So much for a slow start to the new year,” said Han Tan, market analyst at the FXTM trading platform.

“From a pair of tense Senate runoff, to a crowd crossing Capitol Hill and even a cutback in Saudi Arabia’s oil supply, global investors have had a lot to take this week. The momentum of buying stocks continued unabated. “

The main factor that pushed stocks higher has been the Democratic sweep of the White House, Senate and House of Representatives. But Trump’s concession and promise of a “smooth, orderly and seamless transition of power” in a video Thursday night also calmed nerves.

Biden and his Democratic allies in Congress plan to launch a larger economic coronavirus relief package and also focus on longer-term low-carbon infrastructure and initiatives. As part of the stimulus, the president-elect pledged during second-round campaigns in Georgia to secure direct payments of $ 2,000 to Americans “immediately” if both Democrats win their second round.

The rally in US stocks was widespread. Climate-friendly businesses have benefited. Tesla, for example, climbed 7.94% on Thursday, making Elon Musk the richest person in the world. But industrials and other stocks are also on the rise.

The promise of greater stimulus in the world’s largest economy has also boosted markets around the world. Stocks in Asia rallied sharply, with Japan’s Nikkei 225 surging 2.36% overnight and Hong Kong’s Hang Seng climbing 1.2%.

However, China’s CSI 300 lost 0.33% after a six-day rally. The Trump administration, in its final days, attempted another crackdown on Chinese companies, increasing tensions.

Stocks opened higher in Europe on Friday, with the continent-wide Stoxx 600 climbing 0.65%. The FTSE 100 rose 0.13%, putting it on track for a weeklong rise of around 7%, its biggest weeklong rally in two months.

Yields on US Treasuries continued to rise as investors sold safe-haven assets in favor of equities.

The yield on the 10-year Treasury bill, which moves inversely to price, climbed 1.2 basis points to 1.083%, as investors anticipated higher government issuance as well as growth and inflation. The 30-year yield increased 0.8 basis points to 1.853%.

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Rising yields hit gold as investors turned to yielding assets. The spot price of gold was down 1.2% to around $ 1,889 an ounce Thursday morning. Gold has lost nearly $ 100 since its two-month high on Wednesday.

“Gold is very sensitive to US 10-year yield,” said Jeffrey Halley, senior market analyst at foreign exchange firm Oanda. “If the 10-year yield continues to rise gold could seriously threaten support. It could lead to a much deeper sell-off correction.”

But Bitcoin’s surprising rally showed no signs of slowing down, with the cryptocurrency surpassing the $ 40,000 mark on Thursday. It then fell back slightly and was the last at around $ 38,487.

“The cryptocurrency took a big step forward and broke through the $ 40,000 level, which made the $ 50,000 price tag as real as possible,” said Naeem Aslam, chief market analyst at AvaTrade.

“After setting another all-time high, we are seeing profit taking among many investors because they know bitcoin is some kind of beast that can easily move 10% in a day in any direction.”