It is the distrust of polls that the late move to the Democrats was treated with skepticism on Wall Street in the Senate by-elections in Georgia.
The financial markets thus reacted to the news that Raphael Warnock won one of the two Senate run-off matches in Georgia early Wednesday, with Jon Ossoff leading the way and the votes remaining to count in the counties around Atlanta. It puts Democrats on the brink of control of a disproportionately divided U.S. Senate, with Vice President-elect Kamala Harris getting the tie-breaking vote.
The ten-year treasury TMUBMUSD10Y,
pushed more than 1% into expectations of greater spending. The dollar fell, with the euro EURUSD,
trades over $ 1.23. Future on the small-cap Russell 2000 RTY00,
increased, while broader S&P 500 futures contracts ES00,
and Nasdaq-100 futures NQ00,
fell, with technology giants including Facebook FB,
Google Owner Alphabet GOOG,
and Microsoft MSFT,
trades lower in the action before the market for fear of regulatory action. Emerging stock market and value-traded funds rose in German trade.
“While these likely victories increase the level of political uncertainty, and that certain sectors of the US stock market underperform (for example, healthcare, technology), the macro implications of these election results are clearly positive,” said Derek Halpenny, head of world markets research at MUFG Bank in London. “There is now a chance for greater stimulus checks for U.S. households ($ 2,000 instead of $ 600) and a greater prospect for greater fiscal stimulus support in general in the future.”
‘If the Democrats manage to catch up in Georgia, I think it’s an important difference that many of the same players from the Democrats who were there in 2009 would probably use their latest opportunity to promote greater fiscal spending until the to support economic recovery. “In a more pronounced economic recovery, we would expect a further rise in treasury rates, the weakening of municipal and corporate bond spreads, the weakening of the dollar and higher performance of value stocks and emerging market equities,” said Brian Levitt, global market maker. added strategist at Invesco, in a comment before the results.
The rising yield curve – the gap between two- and ten-year yields has widened to the widest since 2017 – should help the banking sector. Shares of JPMorgan Chase JPM,
increased in the pre-trading market.
One big question is whether there is a desire to raise taxes on corporations or wealthy Americans, a move advocated by President-elect Joe Biden.
“Although a ‘blue cattle’ with a Democratic victory in Georgia could revive a debate on future tax increases, we consider it unlikely that the new finance minister, Janet Yellen, will pursue policies that could stifle US economic recovery. . Given her oblique tendency, she would rather focus on more stimulus, ”said Holger Schmeiding, chief economist at Berenberg Bank.
The buzz
Vice President Mike Pence will confirm the votes of the Electoral College, as President Donald Trump has publicly campaigned to reverse the result.
The minutes of the last meeting of the Federal Open Market Committee will be published, as the public comments of various officials in recent days show a division on the issue of bond purchases. The economic calendar also includes ADP’s estimate of the paid sector in the private sector in December, as well as the index for purchasing managers in the service sector.
Tesla TSLA,
Morgan Stanley raised the target price to $ 810 from $ 540, repeating an overweight call to the electric vehicle manufacturer. Barclays, on the other hand, reiterated its $ 230 price target.
Trump has signed an executive order banning Alibaba’s Alipay BABA,
and seven other Chinese applications.
UnitedHealth UNH,
agreed to purchase Change Healthcare CHNG,
at a premium of 41% until Tuesday’s closing.
Random reading
A university is testing automated machines for COVID-19 tests.
NASA’s new telescope could unravel the secrets of the big bang.
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