Donald J. Trump via Twitter / via Reuters
- U.S. stocks on Friday were set to reach record levels once again, with future prices rising after President Donald Trump’s acknowledgment that Joe Biden would become president in less than two weeks.
- Democrats have pledged to launch more economic aid to the coronavirus, sending stocks up in a broad recovery.
- Yields on US Treasury bonds with longer maturities continued to rise as the market anticipated higher issuance and stronger growth and inflation.
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U.S. equities are expected to continue their notable rise in the opening bell on Friday, as indicated by future prices, after President Donald Trump acknowledged defeat in the 2020 elections and investors positioned themselves to get more economic relief from the president-elect. Joe Biden and a Democrat controlled Congress.
Traders continued to sell government bonds and invest in stocks, pushing stocks up in Asia, but gold down. However, Chinese stocks ended a six-day winning streak amid new tensions with the United States.
Investors have accumulated stocks in the past few days with the expansion of the vaccine launch and with Democrats taking control of the U.S. Senate through two runoff victories in Georgia.
Even unprecedented scenes of pro-Trump rioters invading the United States Capitol could not stop the rally, which sent the S&P 500, Dow Jones Industrial Average, Nasdaq and Russell 2000 indices to their all-time highs.
S&P 500 futures were up 0.22% on Friday, while Dow futures were up 0.23% and Nasdaq futures gained 0.32%.
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“It’s a slow start to the new year,” said Han Tan, market analyst at FXTM trading platform.
“From a couple of tense Senate disputes, to a crowd violating the Capitol and even a cut in Saudi Arabia’s oil supply, global investors had a lot to absorb this week. However, the stock-buying momentum continued. unshakable. “
The main factor driving the actions up was the Democratic sweep of the White House, the Senate and the House of Representatives. But Trump’s concession and promise of a “smooth, orderly and continuous power transition” in a video on Thursday night also calmed nerves.
Biden and his Democratic allies in Congress plan to launch a larger round of economic aid for coronavirus and also focus on infrastructure and low-carbon initiatives in the long run. As part of the stimulus, the president-elect pledged, during Georgia’s runoff campaigns, to get $ 2,000 in direct payments to Americans “immediately” if the two Democrats won the runoff.
The recovery in US stocks was broad. Climate-friendly companies have profited. Tesla, for example, shot up 7.94% on Thursday, making Elon Musk the richest person in the world. But industrial inventories and other values are also on the rise.
The promise of more stimulus in the world’s largest economy has also raised markets around the world. Asian stocks rose sharply, with Japan’s Nikkei 225 up 2.36% overnight and Hong Kong’s Hang Seng up 1.2%.
China’s CSI 300 fell 0.33%, however, after a six-day recovery. The Trump administration in its final days tried a new crackdown on Chinese companies, increasing tensions.
Shares opened higher in Europe on Friday, with the Stoxx 600 for the entire continent rising 0.65%. The FTSE 100 rose 0.13%, putting it on the way to an increase of about 7% in one week, its biggest increase in a week in two months.
US Treasury yields continued to rise, as investors sold safe-haven assets in favor of shares.
The yield on the 10-year Treasury note, which moves inversely in price, rose 1.2 basis points to 1.083%, as investors anticipated greater government issuance, as well as growth and inflation. The 30-year yield rose 0.8 basis points to 1.853%.
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The rise in yields hit gold, as investors turned to yielding assets. The spot gold price fell 1.2% to around $ 1,889 an ounce on Thursday morning. Gold has lost nearly $ 100 since it peaked two months ago on Wednesday.
“Gold is very sensitive to America’s 10-year yield,” said Jeffrey Halley, senior market analyst at the foreign exchange firm Oanda. “If the 10-year yield continues to rise, gold could seriously threaten support. This could lead to a much deeper capitulation correction.”
But Bitcoin’s surprising recovery showed no signs of slowing down, with the cryptocurrency surpassing the $ 40,000 mark on Thursday. Then it fell slightly and stood at around $ 38,487.
“The cryptocurrency has reached an important milestone and has surpassed the $ 40,000 level, which has made the price of $ 50,000 as real as possible,” said Naeem Aslam, chief market analyst at AvaTrade.
“After recording another all-time high, we see profit making among many investors, as they know that bitcoin is a type of animal that can easily move 10% in one day in any direction.”