SYDNEY (Reuters) – Wall Street securities futures started strong on Monday while the dollar extended its downtrend as risky assets were strengthened by expectations of less regulatory changes and more stimulus Prefer money under US President-elect Joe Biden.
The Democratic candidate̵7;s victory at the US presidential election is largely priced by markets, which have traded with the views of a Biden president and the Republican-controlled US Senate. last weekend.
E-mini futures contract for the S&P 500 SC1 rose 0.6% on Monday, signaling a positive start to the US market.
MSCI’s broadest index of Asia Pacific shares outside of Japan .MIAPJ0000PUS inched up 0.1 percent, after rising 6.2 percent last week for the best weekly performance since early June.
Chief Financial Officer Jim Wilding at Confluence Financial Partners in Pennsylvania said: “What appears to be divided government at the moment offers more continuity of the current environment than the potential for far-reaching changes. “
“We think this is a positive thing for the stock market, especially in this scenario as it puts higher tax rates very low in the coming years,” he added.
Wilding has added a warning to the S&P 500 .SPX not far from an all-time high.
“While we remain optimistic about the medium-term outlook and believe that a divided government reduces the likelihood of a bear scenario, we will curb unrestrained enthusiasm at current levels,” said Wilding. to speak.
Stocks rallied sharply last week, with the S&P500 .SPX up 7.3%, the best increase in an election week since 1932, according to National Bank Australia analyst Tapas Strickland.
However, Matt Sherwood of Australian fund manager Perpetual said Biden’s victory did not necessarily adjust his portfolio.
“Ultimately, we think the US economy is still quite fragile and growth is slowing down,” Sherwood said.
“You may be more likely to attract your portfolio to higher beta-type markets, such as emerging markets, and potentially better prospects in the energy space. in the case of being wiped out by the Democrats. “
Analysts also warn the path could become tougher from here as investors focus on Biden’s possible fiscal stimulus expansion and measures to reduce the spread of COVID-19.
The United States saw a record number of new coronavirus infections last week, with a total of nearly 10 million cases.
A fiscal stimulus plan is doable despite a divided government, analysts say, although a larger package is less likely. That leaves the US Federal Reserve doing more to boost the world’s largest economy.
As a result, the dollar has weakened USD = in recent days while mandates grow like the Australian dollar AUD = rallied with President Biden considered less likely to be commercially confrontable.
The dollar is weaker than the Japanese yen JPY = at 103.25, after falling about 1.3% last week.
The Aussie is up 0.3%, up 3.3% last week.
Investor focus will also be on the pound and euro this week with upcoming UK-EU trade talks with the EU summit on November 15.
Later in the day, the Bank of England chief economist will deliver a speech on ‘The economic impact of coronavirus and the long-term effects for the UK’.
Euro EUR =, up 1.9% last week, slightly higher on Monday at $ 1.1887. Sterling GBP = is a weaker shade at $ 1,3146.
That makes the dollar index = USD 0.1% reduction.
As for commodities, oil prices rose slightly after Friday’s losses but remained below $ 40 a barrel as global coronavirus infections raised concerns about faint demand.
Gold escalated, with spot prices up 0.36% to 1,958.7 an ounce.