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Distrust of the polls is such that the late move towards Democrats in the Georgia Senate runoff has been treated with skepticism on Wall Street.
The financial markets have therefore reacted to the news that Raphael Warnock won one of the two Senate rounds in Georgia early Wednesday, Jon Ossoff leading the other and the remaining votes are concentrated in the Atlanta counties. This puts Democrats on the precipice of scrutiny from an equally divided US Senate, with Vice President-elect Kamala Harris getting the deciding vote.
The 10-year Treasury TMUBMUSD10Y,
pushed more than 1% into higher spending expectations. The dollar fell, along with the euro EURUSD,
trading over $ 1.23. Small Cap Russell 2000 RTY00 Futures,
rose, while larger futures on the S&P 500 ES00,
and future Nasdaq-100 NQ00,
has fallen, with tech giants including Facebook FB,
Owner of Google Alphabet GOOG,
and Microsoft MSFT,
Lower trading in pre-market stocks due to fears of regulatory action. Emerging and value market exchange traded funds have risen in German commerce.
“While these likely wins increase the level of political uncertainty and certain sectors of the US stock market may underperform (e.g. healthcare, technology), the macroeconomic implications of these election results are clearly positive,” said Derek Halpenny, head research for global markets at MUFG Bank in London. “There is now a chance of bigger stimulus checks for American households ($ 2,000 instead of $ 600) and an increased prospect of more general fiscal stimulus support going forward.”
“If Democrats are successful in solving the turmoil in Georgia, then a key difference this time around, in my opinion, is that many of those same Democratic players who were there in 2009 would likely use their last opportunity to increase budget spending. support economic recovery. In a more pronounced economic recovery, we would expect an even larger hike in treasury rates, narrower municipal and corporate bond spreads, a weaker dollar, and better performance in value stocks and bonds. emerging market equities, ”added Brian Levitt, global market strategist at Invesco, in a note before the results.
The steepening of the yield curve – the spread between 2 and 10 year yields has reached its maximum since 2017 – should help the banking sector. JPMorgan Chase JPM Actions,
increased in pre-marketing trade.
A big question will be whether there will be a desire to raise taxes on businesses or wealthy Americans, a move advocated by President-elect Joe Biden.
“While a ‘blue sweep’ with a Democratic victory in Georgia may reignite a discussion of upcoming U.S. tax hikes, we consider it unlikely that new Treasury Secretary Janet Yellen will pursue policies that could stifle the American economic recovery. Given her dovish bent, she will likely focus on more stimulus, ”said Holger Schmeiding, chief economist at Berenberg Bank.
The buzz
Vice President Mike Pence will certify congressional tally of Electoral College votes, as President Donald Trump publicly pressured him to overturn the result.
The minutes of the latest Federal Open Market Committee meeting will be released, as public comments from various officials in recent days show a split on the issue of bond buying. The economic calendar also includes ADP’s estimate of the private sector payroll in December, as well as the service sector purchasing managers index.
Tesla TSLA,
saw its target price drop from $ 540 to $ 810 by Morgan Stanley, which reiterated an overweight appeal on the electric vehicle maker. Barclays, on the other hand, reiterated its price target of $ 230.
Trump signed an executive order banning Alipay BABA from Alibaba,
and seven other Chinese apps.
UnitedHealth UNH,
has agreed to purchase Change Healthcare CHNG,
at a premium of 41% at the Tuesday close.
Random readings
University tries vending machines for COVID-19 testing.
NASA’s new telescope could unlock the secrets of the Big Bang.
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