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The results, which many feared on Wall Street, were released Wednesday because it was not possible to win the U.S. presidential race on election day, leaving investors in the dark.
This caused a stormy night as the equity futures went public in early Wednesday as investors tried to recalibrate their bets based on a likely outcome. The futures contracts traded on the S&P 500 have fluctuated almost ten times between profit and loss in a 12-hour period, so they are traded at 6am. It’s Wednesday.
But when Wall Street was opened to regular trading, the market seemed – for the time being at least – to have found support and the S&P 500 had grown. Under the influence of the technology rally, profits have been made, although the opportunities have increased for what many investors see as the ugliest outcome for the markets: ongoing uncertainty, a disputed election and a high probability of a government split.
Wednesday morning, there were no final results from several states that will determine whether President Trump will stay in the White House. This may have helped to reassure investors that these key states – Michigan, Wisconsin and Pennsylvania – were still expecting to slowly release the results of the vast majority of the missing ballots.
On Wednesday, the S&P 500 rose more than 2% in the early auction. Composite Nasdaq, which is strongly focused on large technology companies, has risen by more than 3% as a result of the leap of heavyweights such as Apple, Alphabet and Microsoft.
The small stocks, which had to benefit from the wave of government support after Biden’s victory, decreased. The Russell 2000 Small Cap Index fell by about 1%.
Other markets have also been volatile. By Wednesday morning, US Treasury yields – a barometer of expectations for economic growth – had left their overnight lows, with 10-year Treasury bills at 0.78%. The price of American crude oil rose by about half a percent, which is the highest daily level.
The staff of the Ministry of Elections in Detroit counts the absences on Wednesdays. Credit…. Brittany Greeson in the New York Times…
Analysts warn against extrapolating a clear signal from the expected trade, as voting results in the Vortex markets will continue to count, as election results are counted in a few hours and perhaps days.
This is exactly what the market didn’t want to see, and we’re still growing, said Steven Sosnick, head strategist at Interactive Brokers in Greenwich, Connecticut.
Indeed, nocturnal trade has shown how quickly feelings can change. The markets disappeared around 2:00 a.m. Estern, after Mr Trump falsely claimed that he had won the election and that he would ask the Supreme Court to intervene in the race.
Although less extreme, the volatility was also evident on the European markets. After starting the day at a loss, both the Stoxx Europe 600 and FTSE 100 increased by more than 1%.
Investors saw a clearer path on Tuesday as they placed portfolios for the Democrats’ landslide victory in Tuesday’s election. A strong victory for Biden and the Democratic Party would pave the way for a major spending program for a pandemic in Washington early next year.
Wall Street has been asking for such an aid program for months, but in recent weeks, negotiations between the White House and Democratic House leaders have failed.
However, the close results achieved overnight increased the likelihood that Trump would be re-elected and that the Senate would remain under Republican control. On the one hand, Mr Trump’s low taxes and limited regulations were appreciated by investors. On the other hand, analysts have made it clear that a divided government can damage the chances of a large spending programme. Investors may also be concerned that a delay in counting votes could lead to a long period of uncertainty.
If Republicans retain the Senate, we believe the outlook for a bipartisan tax treaty by Congress will be much weaker, capitalist economists wrote in a note Wednesday. The thread running through the stock market, however, is that even the tax increase proposed by Biden is unlikely to see the light of day.
However, until the start of trading in the U.S. on Wednesday, none of these results were optimistic.
At the moment we have a good relationship with the market for a few days – but we need a winner soon or it’s going to spoil the apple basket, said Ryan Dietrick, Chief Market Strategist at LPL Financial.
The ballots will be counted in Milwaukee on Tuesday night. It may take a few days before the final winner of the presidential election is announced. A loan… Chang W. Lee/The New York Times…
Shares rose on election day, while traders and investors waited for a blue wave with Joseph R.’s victory. Biden, Jr. on President Trump and the Democrats’ victory in both chambers of Congress. Stocks increased and US government bonds declined as traders abandoned these traditionally safe assets.
Early on Wednesday morning the markets turned around.
The share futures fluctuated considerably, because in reality it could take days to get a clear result, while Mr Trump tried to win before all the votes were counted. But analysts have also observed the Senate race, which was no longer clearly described as a democratic majority. At 5:30 in the East, the Democrats and Republicans each had 47 seats.
The full Senate results are here, and the news of a lively race in North Carolina is here.
That’s what the analysts said:
Optimism about the blue wave was premature
There’s some confusion about what Mr Thump meant when he said the votes could no longer be counted, said Jane Foley, a Rabobank strategist. But there’s a certain certainty, she said. Optimism about the blue wave was premature.
The idea that Biden won’t get the blue wave through Congress is both good news and bad news for the market, Foley said. On the one hand, there is the frustration that these differences between the House of Representatives and the Senate will not disappear quickly, reducing hopes of a major stimulus package. But on the other hand, it will be more difficult for the Democrats to raise taxes.
Markets are waiting for a recovery plan
We expect market volatility to remain high until the result is clear, wrote Karen Ward, strategist at J.P. Morgan Asset Management, in her note to clients. When this happens, the results are mainly interpreted by the prism of other financial incentives. Politics is important, but other factors will be crucial, in particular progress towards a medical solution for Covid-19.
US growth projections revised downwards
Markets that have become aware of the recovery and the Democrats’ huge economic stimulus package are now holding back their growth expectations, writes Keith Wade, an economist at London-based asset manager Schroders, in a memo to clients. It is estimated that this could cost an additional one percentage point increase in the United States next year.
Investors can wait for the result, but not for too long
I think the market will probably tolerate this until the end of the week, says Eric Lassells, chief economist of RBC Global Asset Management. When we talk about certain disputes that go beyond that – with only a limited perspective to really change the outcome – I think the market can live with that.
The Federal Reserve System will need to do more than.
No results have yet been achieved and the chance of the blue breakthrough expected by the markets is much smaller, wrote Keith Jacques, strategist of Société Générale, in a message to customers. This certainly means uncertainty in the short term until we have a result. This is likely to mean less fiscal loosening than usual and a continued reliance on the Fed to support the economy for a longer period of time.
Estimated leakage to safe assets, such as government bonds
It could take even longer to find out who won the big congressional elections, which still suggests that Democrats and Republicans could go to the Senate of No Man, Mona Mahajan, strategist for Allianz Global Investors, wrote in a memo. In general, markets have performed better under a divided government, with one party controlling only partially the Chamber, the Senate and the President, although a rapid economic stimulus is an important priority in this context. In anticipation of the final result, we expect a security response that is likely to benefit so-called safe havens such as government bonds, the US dollar and gold.
Last month, motorists gathered in front of Uber headquarters to urge voters to vote no to Deal 22. Jim Wilson/New York Times.
California voters voted Tuesday for motion 22, a vote that allows economic giants such as Uber and Lyft to continue to treat directors as independent contractors.
The vote paves the way for the recycling of labour law by companies on a national scale.
Uber, Lyft and the DoorDash delivery service were intended to exempt companies from government employment laws that would require them to hire and pay drivers for health care, unemployment insurance and other benefits. As a concession to the advocates of labour, the initiative offers a minimum wage and limited benefits for the drivers.
The Associated Press predicted early Wednesday that the 22nd United Nations Congress would be held in the United States. The bill received 58% of the votes. In San Francisco, where Uber and Life are based, the strongest opposition faced a deficit of more than 19 points. Fight the patchwork and government legislators against the starters who have spent $200 million to support this measure.
The share prices of the companies that rose by more than 11% each at the beginning of Wednesday’s session.
Since the Californian model is cemented, companies in the EU and other major economies are expected to apply federal laws that protect them from similar labour laws in other states.
The last 14 months in California have been the most critical time on this issue, said Bradley Tusk, a venture capitalist who advised on policy issues in his early years.
However, their victory comes at a time when legislators and federal officials are increasingly trying to seize control of key technologies. Congress members of both parties support hacking social media companies and also support companies like Amazon and Google. Uber and his colleagues in the gigantic economy could get carried away by these anti-technological sentiments.
Oil prices rose on Wednesday as the results of the US presidential election remain uncertain. Brent crude oil, the international benchmark, rose by about 2.5%, while the U.S. West Texas Intermediate standard rose by about 2.7%.
The results of this morning’s elections are not very well known, wrote Bjornar Tonhaugen, head of the oil markets in Rystad Energy, in a note on Wednesday. But, he added, the shopkeepers will keep their eyes on the TV screen.
The oil price, which rose 2% last night, fell after President Trump said he had won the elections, despite several states not releasing the results on the battlefield. Prices recovered quickly.
Without a clear result from the U.S., traders are responding to other news, including industry data released on Tuesday, indicating a sharp decline in U.S. crude oil reserves. This decline could indicate that the economic recovery from the pandemic in the world’s largest oil-guzzling country is stronger than expected. There is growing concern that new blockades in countries such as the UK, France and Germany could reduce oil consumption.
In addition, there is growing hope that OPEC and Russia can agree to further reduce output growth or at least to postpone the planned increase until the beginning of next year.
In the long run, according to analysts, Joseph R.’s victory. Biden Jr.’s victory could have a negative impact on the price of oil. Biden, for example, said he would push for a switch from oil to cleaner energy, which would reduce the use of fossil fuels. It could also try to revive the nuclear deal with Iran, which was torpedoed by the Trump administration, allowing the Iranian oil flow to be put back on the market.
Mr Trump, on the other hand, actively supports the US oil industry and calls for deregulation and lower environmental standards. At the beginning of the year, it relied on OPEC and Russia to reduce production in order to increase prices in the US.
Protesters in Fort Lauderdale, Florida, demand an increase in the minimum wage to $15 by 2019… credit… Joe Roedle/Getty Pictures
On Tuesday, voters in Florida approved an election measure to raise the state’s minimum wage to $15 in 2026.
Florida will be the eighth state with a minimum wage of $15, according to the National Conference of State Legislatures, but Donald Trump was the first to speak in the 2016 presidential election. The district of Colombia has also introduced a minimum wage of 15 dollars.
The Florida measure, known as Amendment 2, won a seat on Tuesday, December, and required at least 60 percent of the votes to pass. With 99% of the votes counted, the measure was just over 61%.
Under this measure, the government’s minimum wage will be raised from $8.56 to $10 per hour in September and then increased by $1 in September each year until 2026. The annual increases are then linked to inflation.
A study by the Florida Policy Institute, a think tank supporting the increase, found that higher wages would directly benefit 2.5 million employees in the state.
Several studies have shown that a moderate increase in the minimum wage does not lead to significant job losses. Economists warn, however, that the impact on employment depends on the degree of increase in relation to the city or state wages.
This can make the $15 minimum wage more expensive in a state like Florida, where wages are generally much lower than in other states that have a $15 minimum wage.
A loan… Joshua Roberts/Raiter.
Between Tuesday’s election and Friday’s employment report in October, the Federal Reserve is expected to announce a policy decision for November.
Chances are that the central bank will go underground on Thursday, both because of the vague economic outlook and because the Fed is politically independent and does not want to be included in the election story.
I don’t think they want to get involved in anything political – not even up close, said Gregory Dako, chief economist at Oxford Economics. Although President Jerome H. Powell is likely to encounter election-related problems in his online press conference, he is likely to avoid them.
I’m sure he’s getting ready to answer some of these questions in front of the mirror now, Dako said.
But even if the outlook for a large-scale government aid programme cools, the proximity of the elections, the outcome of which is still uncertain, could once again draw attention to the central bank’s commitment to strengthen the economy and support the recovery. In March, the Fed cut interest rates to close to zero and bought about $120 billion in government bonds each month to calm the markets and support demand.
Officials at the meeting are expected to discuss their bond purchase plans for the future, but economists expect them to postpone important decisions because the path of economic development remains largely unregulated.
Production data show that the situation has improved recently. Expenditure on goods was substantial and at the beginning of the year was covered by hidden savings, even though higher unemployment benefits had expired and loans for small businesses had dried up. However, the situation could deteriorate as consumers have exhausted their savings and the number of coronaviruses is increasing rapidly, while employment growth is already slowing down.
Economists in the Bloomberg study estimate that employers probably hired or added 600,000 employees in October – a relatively small number compared to the millions of Americans who are still unemployed.
In the past, Federal Reserve officials were put in key positions by the White House Council of Economic Advisers before they left Friday morning. But a secure fax with this data was usually sent late on Thursday afternoon, said a person familiar with the process. Officials do not know the October figures until their meeting.
Mr Powell will hold a press conference around 2.30 p.m. after the Federal Open Market Committee’s statement.
Whoever is elected, the next president will have to deal with an economy that will continue to fluctuate even after last spring’s power cuts. In some areas there is a recovery, but in others there is a deep depression and millions of Americans are still not working.
75.3%
Percentage of the adult population aged 25 to 54 working in September Although this percentage was over 69.7% in April, the lowest level in 45 years, it remains about as bad as the worst of the major recessions.
2.4 million
The number of Americans who were unemployed for more than six months in September is considered to be long-term unemployment.
824,000
Number of Spanish-speaking women who have left the labour market since February. Job losses in the service sector and school closures are particularly serious for black and Spanish-speaking women.
-3.5%
Development of gross domestic product since the end of 2019. The CEO recovered from his spring and fall, but remained well below his pre-pandemic level.
+7.2%
Increase in consumer spending on goods from January to September. During a pandemic, Americans have nowhere to go and they’ve never bought so many things.
-6.1%
Consumer spending on services decreases from January to September. Hotels, restaurants and cinemas have reopened throughout the country, but sales are far from normal.
6.5 million euros
The annual turnover of existing homes increased by 21% in September compared to the previous year. The housing market is fed by extremely low interest rates and by city dwellers looking for more space.
-6.4%
Change in production volume since January. American factories have not been hit as hard by the crisis as many other industries, but like the rest of the economy, they have experienced a slowdown in growth in recent months.
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