Most traders hope that Biden will reduce international conflicts and push for peace. Therefore, their reaction to the election results was positive.
The US presidential election of 2020 has made it into history not only due to the scandal pre-election process and record voting turnout but also due to the unexpected reaction of the markets to the results. Seems that both US and Asia-Pacific stocks like the incoming president. In the wake of Joe Biden‘s election victory, most of the stocks have rallied.
Let us start with the stock market indices. Last week, Dow Jones Industrial Average (INDEXDJX: .DJI) closed 0.24% down, at 28,323.40. S&P 500 (INDEXSP: .INX) index ended the week 0.03% down, at 3,509.44. Nasdaq Composite (INDEXNASDAQ: .IXIC) meanwhile gained 0.04% to end Friday’s session at 11,895.23.
But speaking of the whole last week’s performance, the S&P 500 and Nasdaq jumped 7.3% and 9%, respectively, while the Dow rose 6.9%. In early trade on Monday, futures on the Dow Jones Industrial Average rose 349 points, implying an opening gain of about 330 points. S&P 500 futures and Nasdaq 100 futures also both traded in the green. S&P futures were up around 1.5% and Nasdaq Composite futures were up 2.1%.
In the Asia Pacific, markets rallied on Monday as well. South Korea’s Kospi Index (KOSPI) was up 1.3%. Further, Hong Kong’s Hang Seng Index gained 1.2% and China’s Shanghai Composite Index added 1.1%. Japan’s Nikkei jumped by 2.1%, which is its highest level in nearly three decades. The Shenzhen component gained 2.43%.
Following the election results, stocks have risen as well. For example, shares of Alibaba Group Holding (NYSE: BABA) stock gained 3.55%.
Biden’s Encouraging Policy
Biden and his Vice President-elect Kamala Harris are aiming to provide a bigger fiscal stimulus, a public option in health care, investment in sustainability, and a more measured approach to foreign policy and trade. According to Biden’s victory speech on Saturday, he will work toward these goals with an eye toward uniting a deeply divided nation, calling for an end of “this grim era of demonization in America” and underscoring that “if we can decide not to cooperate, then we can decide to cooperate.”
Most traders hope that Biden will reduce international conflicts and push for peace. For example, in the Middle East, where the economy is founded on oil and gas, there are hopes for regional growth and stability.
Talal Samhouri, the head of asset management at Doha-based Amwal LLC, said:
“We are expecting less stress in terms of trade war, trade negotiations, whether with North American partners, European partners or China of course. This definitely will help regional markets because they are increasingly dependent on selling oil to southeast Asia, and that region will be the greatest beneficiary of end of trade wars.”
Besides, analysts are wondering what will be Biden’s approach to COVID-19. Chris Gaffney, president of world markets at TIAA Bank, said:
“The biggest factor investors have to be aware of and the biggest thing that’s going to determine returns in the short-term is Covid. It’s not going to be who’s in the White House, it’s not going to be if we get a stimulus package or not. It’s all about Covid right now.”
Biden himself was not clear about his attitude to dealing with the coronavirus. But he promised to form a task force of “leading scientists” to address the problem.
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