Wall Street saw its biggest gains in about five months, as Americans voted between incumbent President Donald Trump and Democrat candidate Joe Biden, who has been leading in the polls. Stocks surged as investors hoped for a Biden win, which means a more generous stimulus package to be deployed as soon as possible. Previously, Democrats proposed a $2.4 trillion relief package, but the White House hasn’t endorsed it.
The jump in stock prices may also have to do with technical analysis reasons, as the market rebounded from a massive selloff last week, which was the worst week in seven months for the S&P 500 index. The benchmark index rose 1.78% on Tuesday. Elsewhere, the Dow surged 2.06%, and Nasdaq added 1.85%.
10 out of the 11 sectors of the S&P 500 ended the session higher, with financials and industrial being among the best performers.
In European Wednesday morning, US stock futures are up in volatile trading as the election results at this point show a tight battle, with Biden’s lead over Trump narrowing. At the time of writing, Biden has 49.8% votes at a national level, while Trump has 48.6%. Still, Biden secured a win in 223 electoral colleges while Trump in 174.
President Donald Trump is leading his rival in the vital battleground state of Florida and in several other swing states that might decide the results, including Texas, North Carolina, and Ohio. Biden is expected to win in a dozen other swing states, though the full results will be available in days or months in some cases.
It seems less possible that Democrats would be able to deploy the so-called blue wave, which means a clean win of the presidency, Senate, and the House of Representatives.
In Asia, stocks are mostly bullish, though they have departed from session highs. The US votes are counted, and there is still no clear winner yet, with Trump having the chance to defy polls again. Also, the results may be contested by the losing candidate after mail-in ballots are counted.
China’s Shanghai Composite is up 0.21%, and the Shenzhen Component has gained 0.25% after opening lower. Data released earlier in the day showed that Caixin services PMI rose to 56.8 in October, up from September’s 54.8 reading.
Hong Kong’s Hang Seng Index is up 0.12%, as it recovers after Ant Group’s surprising halting of a dual $35 billion IPO launch on both the Shanghai and Hong Kong exchanges. The Shanghai stock exchange suspended Ant’s IPO on its tech-oriented STAR Market, forcing the company to also freeze the Hong Kong leg of its dual listing. The move came after Ant met with China’s financial regulators on Monday, and was told that the fintech business would face tighter scrutiny. Ant would have launched the largest IPO in history, but the shocking decision of the Shanghai exchange spoiled Jack Ma’s plans. Ant parent Alibaba saw its shares falling by about 10%.
Japan’s Nikkei 225 closed 1.87% higher, and Australia’s ASX 200 fell 0.07%.
South Korea’s KOSPI is 0.60%, and India’s Nifty 50 has gained 0.55%.
European stock futures are mixed on Wednesday morning. Ferrari surged about 6% after the company said it would meet its guidance for 2020.
In the commodity market, oil prices continue to recover, surging over 2% in early trading on Wednesday, after adding about 5% in the previous two sessions. Prices maintain their bullish stance after the American Petroleum Institute said that US crude inventories dropped by 8.01 million barrels for the week ending October 30, while analysts expected a 600,000-barrel build. Meanwhile, the OPEC+ cartel led by Saudi Arabia and Russia might extend its production cuts into 2021, as the COVID resurgence in Europe and the US is putting pressure on crude demand.
Gold is down as the votes are counted, with the metal being under pressure amid a stronger US dollar. Gold futures have declined by 0.59% to $1,899.
In FX, the US dollar is bullish again after Biden’s lead has narrowed, and Trump seems to have won Florida. The USD Index is up 0.40% and close to 94.00. EUR/USD is down 0.49% to 1.1654.
The British pound has also lost almost half a percent versus the greenback and is slightly down against the euro. The UK and the EU still cannot bridge gaps amid extended talks.
