The distrust of the polls is such that the latest move towards Democrats in the second-round election for the Georgia Senate was treated with skepticism on Wall Street.
Therefore, the financial markets reacted to the news that Raphael Warnock won one of the two second Senate rounds in Georgia on Wednesday morning, with Jon Ossoff leading the other and the remaining votes to be counted centered in the counties around Atlanta. This puts Democrats on the precipice of control of an equally divided US Senate, with Vice President-elect Kamala Harris getting the tiebreaker vote.
The 10-year Treasury TMUBMUSD10Y,
pushed more than 1% in expectations of higher spending. The dollar fell, with the EURUSUSD,
trading above $ 1.23. Futures in the low-capitalized Russell 2000 RTY00,
rose, while the wider S&P 500 ES00 futures,
and future Nasdaq-100 NQ00,
fell, with tech giants, including Facebook FB,
Alphabet GOOG, owned by Google,
and Microsoft MSFT,
lower trading in the pre-market stock due to fear of regulatory action. Funds traded on stock exchanges and emerging markets have increased in German trade.
“While these likely victories increase the level of political uncertainty and certain sectors of the US stock market may underperform (health, technology, for example), the macro implications of these election results are clearly positive,” said Derek Halpenny , head of global markets research at MUFG Bank in London. “There is now a chance for bigger stimulus checks for US households ($ 2,000 instead of $ 600) and a greater prospect of greater general fiscal stimulus support in the future.
“If Democrats manage to bring about the upheavals in Georgia, a fundamental difference this time, in my opinion, is that many of the same Democratic players who were there in 2009 would probably use their last opportunity to advance more fiscal spending to support the economic recovery. In a more pronounced economic recovery, we would expect an even greater increase in Treasury rates, narrowing spreads for municipal and corporate bonds, weakening the dollar and greater performance of value stocks and emerging market stocks ”, added Brian Levitt, of the global market Invesco strategist, in a note before the results.
The increasingly steep yield curve – the gap between 2- and 10-year earnings has widened to the largest since 2017 – should help the banking sector. JPMorgan Chase JPM shares,
increased in pre-market trade.
A big question will be whether there is a desire to raise 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 tax hikes in the U.S., we consider it unlikely that the new Treasury secretary, Janet Yellen, will pursue policies that could stifle the US economic recovery. Given its dovish inclination, its focus is likely to be on more stimuli, ”said Holger Schmeiding, chief economist at Banco Berenberg.
The buzz
Vice President Mike Pence will certify the counting of Electoral College votes in Congress, as President Donald Trump publicly pressured him to overturn the result.
The minutes of the last meeting of the Federal Open Market Committee will be published, as public comments from several employees in the past few days show a split in the issue of bond purchases. The economic calendar also includes ADP’s estimate of private sector payroll in December, as well as the index of purchasing managers in the service sector.
Tesla TSLA,
saw its target price rise from $ 540 to $ 810 by Morgan Stanley, who reiterated an excessive purchase option from 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 buy Change Healthcare CHNG,
with a 41% premium by the end of Tuesday.
Random readings
A university is testing vending machines for COVID-19 tests.
NASA’s new telescope could unlock the secrets of the Big Bang.
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