The stock market has risen despite the chaos in the country’s capital – observers have said that future stimulus and tax policy could be reasons.
The S&P 500 index, which measures the share performance of 500 large companies in the US, closed at an all-time high on Wednesday with the news that Georgia will have two new Democratic Senators and the confirmation that Joe Biden will be the next president.
This is another hit for President Trump, who has spent much of his presidency on the state of the stock market, and now faces another round of accusations and renewed calls for his removal, even before the end. of his term on January 20th.
Peter Tchir of capital market firm Academy Securities told CNBC the chaos in Washington is a ‘one-time situation’.
“This is an isolated event as opposed to a larger movement, and therefore we can look at the new government and stimulus,” he said.
He said the movements in the market are a clear sign that the market is waiting for stimulus and some tax policy. The market is looking forward to earnings and growing further.
Baird chief trading and financial services chief Jack Miller told CNBC that “it’s a little difficult to reconcile all the different forces at play here, but in the end it looks like the election is carrying the day.”
Shares benefiting from the stimulus have risen 2% -4% now that Democrats will control the White House and both chambers of Congress.
Sam Stovall, CFRA’s chief investment strategist, told MarketWatch: “Despite the political implications of the current takeover of the Capitol, Wall Street is still being encouraged by the economic potential of a Democratic ‘trifecta’.”
Technical stocks are lower due to fears of new laws and higher taxes on capital gains. Mr. Tchir said that raising taxes on ordinary people would be controversial for the incoming government, but that raising capital gains tax on rich people would cause much less controversy. I’m not sure the public will be upset about that “.