A new coronavirus stimulation agreement is still being made between Democrats and Republicans, as they cannot agree on a conclusion.
US futures extended momentum Wednesday night, after delivering a strong post-election rally on the prospect that the outcome of the US presidential election will be determined soon.
Dow Jones industrial index futures were virtually unchanged, after the blue-chip index rose nearly 370 points at the close. It was the third day in a row. Futures for the broad S&P 500 index remained largely unchanged, after it announced its best day of five months.
Nasdaq futures were up 0.3 percent. The tech heavy index recorded the biggest gain in more than six months earlier in the day as traders doubled down on tech stocks.
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Democratic candidate Joe Biden has only one state left to win the 270 electoral votes needed to win the presidential race. On Wednesday, Biden overcame both Wisconsin and Michigan, key battlefield states that collapsed around Hillary Clinton in 2016.
The victory there left Biden at 264th place of electoral votes – just 6 votes behind the required 270. President Donald Trump, who currently has 214 electoral votes, must capture all of the remaining states, hoping that Biden’s predictions of an Arizona victory are false or find a legitimate strategy.
Earlier on Wednesday, Wall Street accepted the reversal of more deadlock in Washington even as the results of the US Presidential election were still in limbo. The chances for Democrats to flip enough seats to take control of the Senate seem to be dwindling as Republicans face challenges in several key races.
“A lot of uncertainty has been removed from the market, and although it remains unresolved, in previous eras when we had a divided government, it looked like we were going to have some time. The stock market is still doing well this time around, “said Scott Glasser, co-chief investment officer at global investment management firm ClearBridge Investments, said in a note.
The gains made when the market focuses on the benefits of the country’s political control remain divided between Democrats and Republicans, analysts say. The possibility of a deadlock in the National Assembly leaves investors optimistic that major policy changes will be difficult to implement.
Colin Moore, chief investment officer at Columbia Threadneedle, said: “The United States has seen government split frequently and it has had the effect of curbing some of the more extreme change proposals during that time. “.
“For some, this power test is a more appropriate result, but given the need for additional fiscal measures to address the economic losses caused by an ongoing pandemic, the ability to work. Together in the coming months is essential, “Moore added.
With Republicans moving closer to maintaining control of the Senate, the prospect of tax increases and stricter regulations on businesses investors would expect should Democrats reach an election in spite of a massive stimulus to the economy that some on Wall Street deem necessary. not sure either.
Much of Wednesday’s strength for Wall Street was due to soaring tech stocks. Investors increasingly see these stocks as some of the safer bets on the market, that can increase their returns even during a pandemic as everyday life changes more online.
All of these changes are a bit reminiscent of four years earlier, when Trump surprised the markets by winning the White House. The market initially plunged after polls and market expectations went wrong in 2016, but they quickly turned back with the expectation that Trump’s pro-business stance would be good. for corporate profits.
The difference this time is that uncertainty seems to be lingering. It may take a few days for the winners in the White House to show up and professional investors say they are preparing for strong market moves in the meantime.
Trump’s election campaign on Wednesday filed lawsuits over voting in Michigan and Pennsylvania, and the president previously said he would take the election to the Supreme Court, though it was unclear exactly what the meaning of the he.
Many fund managers recommend investors to take a stance over the turmoil largely because one cannot move the economy alone and stocks tend to rise regardless of which party controls the House. White. They said that what happened to the coronavirus pandemic was likely to affect the market much larger than the results of this election.
“Reducing the impact of COVID 19 means much more to the US and global economy than the results of the US election,” Mr. Moore said.
Contribution: Associated Press
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