Stock futures open a little higher on Monday night before Election Day, as investors weigh in on a range of possible outcomes amid ongoing pandemic and economic tensions prolonged.
Contracts on the Dow rose just over 40 points, or 0.2%, as overnight trading began, following gains of more than 420 points, or 1.6%, earlier in Monday’s session. Futures for the S&P 500 and Nasdaq also edged up slightly towards the end of the session.
Some analysts warned against betting drastically on the direction of the stock market after the election, especially before volatile moves that occurred during and after the 2016 presidential election. translation overnight after Election Day 2016, when states were called upon, the S&P 500 futures fell 5% to activate the “cap” and prevent further losses – but the index reinstated those This loss to close is 1% higher by the end of the first regular session after Election Day.
“The experience of 2016 shows that investors should be careful of taking strong stances on political results and, worse, mechanically convert those results to market results,” Neil Shearing, chief economist at Capital Economics, said in a note on Monday. “Back then, the consensus was that Trump was unlikely to win, but if he did then his rhetoric about trade and the ‘carnage in America’ would have catastrophic effects on the stock market. contract. We all know what happened next. “
And as the number of voters arriving early and mailing soared this year, the results of the election and the winners in the White House and Senate may not be clear until at least this weekend. As of Monday night, more than 97 million Americans had voted in the general election, according to the US Elections Project, with a total of more than two-thirds of the voters voting in the 2016 general election. .
Based on Monday’s nationwide poll, former Vice President Joe Biden had the advantage of President Donald Trump’s victory after the election. However, his leading position shrank significantly when considering the key alternating states compared to national polls, leaving the path of victory for the incumbent. According to Quinnipiac’s final pre-election poll released on Monday, Biden took the lead nationwide with 50% of voters likely to support him compared with 39% for Trump. But the poll found that in Florida, 47% of voters were likely to favor Biden compared with 42% favoring Trump, and in Ohio 47% favoring Biden and 43% supporting Trump.
But the White House winner won’t be the only factor in consequences for the market: The combination of the party that holds the presidency and the Senate is also set to play a key role in the Policies become laws, setting the stage for an entity. impact on US businesses.
“We consider fiscal policy the most important area to watch, as it has helped to sustain the economy through COVID shocks. In our view, Biden’s two winning scenarios look very different through this financial lens, ”BlackRock analysts said in a note on Monday. “We believe a Democratic sweep could pave the way for a new large-scale fiscal stimulus and boost spending on clean energy, transport and housing. It could also bring higher taxes for companies and the wealthy.
“A Biden victory with a Republican-controlled Senate could lead to much less fiscal stimulus, less public investment and no major tax changes,” the analysts said. fiscal preference under the second Trump tenure may lie somewhere between these two scenarios, we believe, while public investment may be similar to that under divided government in Biden ”.
They added: “We believe that an ‘tax-focused’ electoral analysis – with Democrats’ chasing down as negative of the market and division of government as positive – is too simple. “Investors will have to balance higher tariffs and stricter regulation of the Democratic sweep with greater financial support and more predictable foreign policy. We see the impact. The main dynamic of this scenario for fixed income and its leading position in the stock market It could modestly push long-term interest rates higher and provide a market valuation of the high inflation regime. than that we have reflected in our strategic asset perspective. “
6:05 pm ET Monday: Stock futures go higher before Election Day
Here are the key moves in the market, as of 6:05 pm ET Monday:
S&P 500 futures (ES = F): 3,308.00, up 7.5 points or 0.23%
Dow Futures (YM = F): 26,877.00, up 81 points or 0.3%
Nasdaq Futures (NQ = F): 11,082.25, up 19 points, or 0.17%
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