SINGAPORE (Reuters) – Bonds fueled losses as stocks and commodities gained on Thursday in anticipation of massive Democratic government debt and spending fueling growth after the second round that gave the party control of the US Congress. .
The US Treasury suffered its sharpest decline months after Democratic victories in two contests in Georgia gave them close control of the Senate, reinforcing President-elect Joe Biden’s power to approve his agenda.
The sense of risk was temporarily dampened by images of President Donald Trump’s supporters invading the Capitol, but the S&P 500 futures rose 0.6% and the Nasdaq 100 futures rose 0.8% in the Asian session when order was restored. FTSE futures rose 0.4% and EuroSTOXX 50 futures rose 0.2%.
Across Asia, the large economically exposed stocks led the gains. Chip makers Samsung and SK Hynix took South Korea’s Kospi to a record high. Mining companies Rio Tinto and BHP have reached their historic highs.
The broader MSCI index for Asia Pacific stocks outside Japan rose 0.7% and Japan’s Nikkei rose 2%, reaching the highest index since 1990.
“It’s basically a reflective trade,” said Mathan Somasundaram, head of Sydney’s research firm Deep Data Analytics, who added that the Democratic sweep was unexpected by most investors and “changes a lot.”
“Even though it is a very thin margin, it gives Democrats a two-year window (to pursue their agenda),” he said. “Anything that benefits from rising prices will perform well … when you look at the policy settings they’re trying to go through, it’s about printing (money for) Main Street and not Wall Street.”
The liquidation of Wednesday’s securities pushed the yield on 10-year US Treasury bonds to more than 1% for the first time since March. It rose to 1.0510% on Thursday. [US/]
The US dollar sank when the result became clearer because currency traders believe that the large and growing US trade and budget deficits will weigh on the dollar. [FRX/]
The dollar hit a nearly three-year low against the euro of $ 1.2349 and hovered close to that level on Thursday. He also languished close to the recent multi-year casualties against the Aussie, the kiwi and the Swiss franc.
CAPITOL CHAOS, CHINA CRACKDOWN
The exuberance was tempered by some sales of technology stocks, as investors expect the industry to face taxes and regulations, and by disturbing scenes of protesters breaking into the Capitol to interrupt the certification of Donald Trump’s electoral defeat.
Wall Street has declined since the peak of sessions as the police evacuated lawmakers and struggled for more than three hours to clear the Capitol from Trump supporters.
“What gives us a little break is that the economy is still very fragile and I think it is unlikely that Democrats will have a time as easy as the markets are trying to predict the approval of some of these policies,” said Tim Chubb, chief investment officer for the consultant. Girard Fortune in Pennsylvania.
Since then, Congress has met again to resume electoral certification, where it quickly became clear that objections by pro-Trump Republican lawmakers to Biden’s victory in battlefield states would be overwhelmingly rejected.
Meanwhile, the U.S. crackdown on Chinese companies appears to be deepening, with sources telling Reuters that the Trump administration is considering extending investment bans to tech giants Alibaba and Tencent.
Both shares fell more than 4% in Hong Kong and the shares of three Chinese telecommunications companies that the New York Stock Exchange decided to withdraw after a week of unexpected changes also fell sharply.
Oil prices hovered close to a 10-month high, heating up following a production cut promised by Saudi Arabia. Brent oil futures were up 0.7% to $ 54.69 a barrel, and US oil futures were up 0.9% to $ 51.07 a barrel. [O/R]
Gold remained stable at $ 1,920 an ounce and bitcoin, after breaking a new record of $ 37,800.
Reporting by Tom Westbrook in Singapore. Additional reporting by Joori Roh in Seoul and Imani Moise in New York; Edited by Sam Holmes, Jane Wardell and Lincoln Feast.