US stocks higher despite no election result… and Uber’s big win
US stocks closed higher, with no election results able to be called and indeed too close to call. Uber has a big win.
US stocks closed higher, with no election results able to be called and indeed too close to call.
According to Chris Beauchamp, Chief Market Analyst at IG, “The US election results are still to be fully determined, but the expected selloff has not arrived. We did see some volatility following the overnight highs in US futures, but this dip was rapidly bought, showing that perhaps it was the just existence of the election rather than concerns about its outcome that was holding a wave of buying in check.
“Once more, polls have proven to be rather wide of the mark, and the focus on a possible ‘blue wave’ has been shown to be a complete red herring.
“The bigger problem now is that a new fiscal stimulus is now very unlikely in the foreseeable future, given the potential for extended legal action in coming weeks before a winner emerges, and even then we can look forward with trepidation to the president (whoever that is) having to battle lawmakers to get a stimulus bill through.
“All those concerns appear to be off in the future this morning however, as European markets move higher and US futures point to a more optimistic open.
“The week is not yet over of course, and while the focus on the count in various states continues, we also start off the run into non-farm payrolls with today’s ADP report, and this will be followed up by the BoE and the Fed tomorrow, both of which could be interesting given the need for central banks to do more.
“The Fed in particular will have to take up its QE role again with a weary sigh, in order perhaps to provide yet another bridge to the future when, hopefully, a government stimulus package will have been agreed.”
The Dow Jones Industrial Average DJIA rose 367.63 points, or 1.3%, enjoying a third straight day of gains. The S&P 500 SPX added 74.42 points, or 2.2% and the Nasdaq Composite COMP soared 430.21 points, 3.9% – the best post-election daily gains on record for each of them.
Wall St looks to be factoring in a divided US government, which would see the Trump administration tax cuts remain in place no matter who takes office.
“I think the market’s reaction is rational, in the sense of how it’s reacting by sectors,” said David Bianco, chief investment officer, Americas at DWS Group.
Bianco pointed to rising shares in the technology and health-care sectors, leading all three major stock benchmarks higher on Wednesday.
“The big question overall is, does the market belong here, given that the election hasn’t been finalized?” he said. “At this moment, cash is not trash. Cash is a fine place to be.”
Another question is how volatile will the market be post election?
In other news
Oil futures rose, with the U.S. benchmark CL up 4% to settle at $39.15 per barrel.
Gold futures GC00 slumped 0.7% to settle at $1,896.20 as prospects for a large fiscal spending package favoured by Democrats faded.
The Stoxx 600 Europe Index XX:SXXP jumped 2.1%. London’s FTSE 100 UK:UKX was up 1.7%.
Uber was a big winner.
After winning a legislative fight on Wednesday, its shares rose 14.6%. The win sees the company maintain its employee classification, with drivers remaining as independent contractors, not employees. This win also saw and Lyftgain 11.3%.
NASDAQ: + 3.85%
S&P 500: + 2.20%
FTSE 100: + 1.67%
DAX: + 1.95%
CAC 40: + 2.44%
Nikkei 225: + 1.72%
Hang Seng: - 0.21%
S&P/ASX 200: - 0.71%