So much is the distrust of the polls that the last step toward Democrats in the Georgia Senate election was treated with skepticism on Wall Street.
So financial markets have reacted to the news that Raphael Warnock won one of two Senate qualifiers in Georgia early Wednesday, with Jon Ossoff at the helm of the other and the remaining votes to count in Atlanta counties. . This puts Democrats on the precipice of control of a uniformly divided U.S. Senate, with elected Vice President Kamala Harris getting the tiebreaker vote.
The TMUBMUSD10Y Treasury at 10 years,
boosted more than 1% in expectations of higher spending. The dollar fell, with the euro EURUSD,
trading above $ 1.23. Futures on the Russell 2000 RTY00 small capitalization
increased, while the future broader S&P 500 ES00,
and futures NQ00 of Nasdaq-100,
fell, with tech giants like Facebook FB,
Owner of Google, Alphabet GOOG,
and Microsoft MSFT,
it is traded in pre-market shares for fear of regulatory action. Funds traded on the emerging and stock market rose in German trade.
“While these likely victories increase the level of political uncertainty and some sectors of the U.S. equity market may perform lower (health care, technology, for example), the macro implications of these election results are clear. positive, ”said Derek Halpenny, head of global market research at MUFG Bank in London. “There is now the possibility of checking for larger incentives for US households ($ 2,000 instead of $ 600) and raising the prospect of a larger overall fiscal stimulus in the future.”
“If the Democrats manage to end the inconvenience in Georgia, then a key difference this time, in my opinion, is that many of these same Democratic players who were there in 2009 would probably take their last chance to advance on more tax spending. In a more pronounced economic recovery, we would expect a further rise in Treasury rates, a tightening of municipal and corporate bond spreads, a weakening dollar and a higher return on equity stocks. and emerging market equities, ”added Brian Levitt, strategist at Invesco, in a note ahead of the results.
The sharp yield curve, the gap between 2- and 10-year yields, widened to the widest since 2017, should help the banking sector. Shares of JPMorgan Chase JPM,
increased in premarket trade.
A big question will be whether there will be a desire to raise taxes on corporations or wealthy Americans, an action advocated by President-elect Joe Biden.
“While the outcome of a‘ blue triumph ’with a democratic victory in Georgia may rekindle a discussion about the upcoming U.S. tax hikes, we consider it unlikely that the new Treasury Secretary, Janet Yellen, will conduct policies that could stifle the U.S. economic recovery. Given its impoverished trend, it will likely focus on more stimulus, “said Holger Schmeiding, chief economist at Berenberg Bank.
The buzz
Vice President Mike Pence will certify the counting of Electoral College votes in Congress as President Donald Trump put public pressure on him to overturn the result.
The minutes of the last meeting of the Federal Open Markets Committee will be published, as public comments from several officials in recent days show a split over the issuance of bond purchases. The economic calendar also includes the ADP estimate of private sector payrolls in December, as well as the index of purchasing managers in the services sector.
Tesla TSLA,
saw its target price rise to $ 810, from $ 540, by Morgan Stanley, who reiterated an overweight call to the electric vehicle maker. Barclays, by contrast, reiterated its $ 230 target price.
Trump signed an executive order banning Alipay BABA from Alibaba,
and seven other Chinese applications.
UnitedHealth UNH,
agreed to buy Change Healthcare CHNG,
with a 41% premium until Tuesday’s close.
Random readings
A university is testing COVID-19 test vending machines.
NASA’s new telescope can reveal the secrets of the Big Bang.
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