The mistrust of polls is so great that the late move to Democrats in the Georgia Senate elections on Wall Street was treated with skepticism.
The financial markets have thus responded to news that Raphael Warnock won one of two Senate second rounds in Georgia on Wednesday, with Jon Ossoff leading the other, and the remaining votes were counted in the Atlanta districts. That puts Democrats on the verge of scrutiny of an equally divided US Senate, with Vice President-elect Kamala Harris getting the tiebreaker.
The 10-year Treasury TMUBMUSD10Y,
more than 1% in the expectation of more spending. The dollar fell, with the euro EURUSD,
trade above $ 1.23. Futures on the small-cap Russell 2000 RTY00,
rose, while broader S&P 500 futures ES00,
and Nasdaq-100 futures NQ00,
fell, with technology giants including Facebook FB,
Google owner Alphabet GOOG,
and Microsoft MSFT,
trade lower in premarket measures for fear of regulatory action. Emerging markets and value-listed funds rose in German trading.
“While these likely victories increase levels of political uncertainty and could underperform certain sectors of the US stock market (e.g. healthcare, technology), the macro implications of these election results are clearly positive,” said Derek Halpenny, head of research for global markets at MUFG Bank in London. “There is now a chance of greater stimulus controls for US households ($ 2,000 instead of $ 600) and a greater prospect of greater fiscal stimulus support in general in the future.”
“If the Democrats manage to ease the turmoil in Georgia, then a major difference this time around, in my opinion, is that many of those same Democratic players who were there in 2009 would probably use their last chance to get more fiscal spending to support the economic recovery In a more pronounced economic recovery, we expect an even further rise in government bond yields, a tightening of spreads on municipal and corporate bonds, a weakening of the dollar and better performance of value and equities. emerging markets, ”adds Brian Levitt, global market strategist at Invesco, in a note preceding the results.
The steeper yield curve – the difference between the 2- and 10-year rates has become the largest since 2017 – should help the banking sector. Shares of JPMorgan Chase JPM,
rose in premarket trading.
A big question will be whether there will be a desire to impose taxes on corporations or wealthy Americans, a move advocated by President-elect Joe Biden.
“While a blue sweep with a Democratic victory in Georgia could revive a discussion of upcoming tax increases in the US, we consider it unlikely that new Treasury Secretary Janet Yellen would pursue a policy that would help the US economic recovery. can suffocate. Given her moderate stance, her focus will likely be on more stimulus measures, ”said Holger Schmeiding, chief economist at Berenberg Bank.
The buzz
Vice President Mike Pence will certify the electoral college’s congressional vote, as President Donald Trump publicly lobbied him to reverse the result.
The minutes of the latest Federal Open Market Committee meeting will be published as public comments from various officials over the past few days reveal a division on the issue of bond purchases. The economic calendar also includes ADP’s estimate of private sector payrolls in December, as well as its index for purchasing managers in the services sector.
Tesla TSLA,
saw its target price be raised from $ 540 to $ 810 by Morgan Stanley, who repeated an overweight appeal to the electric vehicle manufacturer. Barclays, on the other hand, reiterated its $ 230 price target.
Trump signed an executive order banning Alibaba’s Alipay BABA,
and seven other Chinese apps.
UnitedHealth UNH,
agreed to purchase Change Healthcare CHNG,
at a premium of 41% until the end of Tuesday.
Random reads
A university is trying out vending machines for COVID-19 tests.
NASA’s new telescope can unravel the secrets of the Big Bang.
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