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Market Sentiment Improves as Biden Nears from the White House

Market Sentiment Improves as Biden Nears from the White House

Joe Biden may become the next US President, while the market prices in a possible Congress gridlock. What moves prices today?

Mail vote, the surge in COVID-19 cases in the US-led too many people to choose mail vote on voting in person making it more difficult for some states to declare a winner immediately after the voting.

Biden’s Advantage, Biden has 264 out of 270 votes required in the electoral college to win the presidency. At present, all eyes are on Nevada, if Biden wines this state he would get the 6 votes he needs to become the elected US President regardless of what happens with other key states like Pennsylvania.

A President Without Majority, polls of a blue wave in the US proved to be wrong as Republicans seem to be on course to keep their Senate’s majority, and Democrats to keep theirs in the house. A Republican Senate will hinder Biden if he wins the presidency from passing his legislative agenda, while a Democrat House will do the same if Trump wins.

Fed Meeting, the FOMC will meet on Thursday and while elections’ results are still uncertain the Fed members will try to calm markets pledging they would do whatever it takes to help the economy back on track, although the Fed Chairman Powell may stress the importance of the stimulus package for the economic recovery.

Equities

Global stock markets closed in the green on Wednesday as a divided Congress would hold either President from changing the current Tax policy. Nonetheless, it would mean a sub $2Trillion fiscal package.

Stock Market

Change %

S&P 500

+1.4%

Dow Jones

+0.4%

NASDQ

+4.2%

Japan 225

+0.5%

DAX 30

+0.3%

FTSE 100

+0.5%

CAC 40

+0.7%

EUR/USD and Main FX Markets

The greenback rallied on Wednesday on news of the President’s Trump intentions to contest the presidential election’s results due to “mail vote fraud”. That led investors to keep demand on safe havens like the US bonds and the US Dollar. However, Biden’s victories in key states like Wisconsin and Michigan increased the probability of ending the presidential competition without the need of waiting for the US Supreme court verdict. The US Dollar index could be on the way for a test of 91.72.

The EUR/USD rebounded on Wednesday around 1.1600 and maintained the pair’s sideways move. Therefore, the price may rally for a test of 1.1909.

The GBP/USD traders monitor the EU/UK trade talks amid concerns of differences on issues like fisheries and fair competition. The pair closed on Wednesday below 1.3048 hinting towards 1.2773.

Gold and Oil

The crude price continued its recovery on expectations of OPEC+ group may extend productions cut to post January 2021. The Brent Crude closed on Wednesday above 39.60 eyeing a test of 41.70. A close above this level could send the price even higher towards 43.58.

The Gold price stabilized above $1,861 and could be on the way for a test of $1,921. A close above that level could send the price even higher towards a test of the $2000 level.

Looking Ahead

Investors will follow the US elections updates all day and EUR/USD traders will check at 11:00 AM (GMT) the Eurozone retail sales numbers of September and will tune in the ECB Guindos speech at 1:40 PM.

The British Pound traders will follow the UK chancellor Sunak’s speech at 4:00 PM and the BoE Governor Bailey’s speech at 1:30. Additionally, the market will check the US initial jobless claims at 2:30 PM and the Fed rate decision at 8:00 PM, then the Fed chair press conference at 8:30 PM.

Esta información/estudio preparada por Mahmoud Alkudsi no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.

El estudio proporcionado no constituye los puntos de vista de JME Financial Services (Pty) Ltd., ni es una invitación a invertir con JME Financial Services (Pty) Ltd. El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.

A partir de la fecha en la que se publique el informe, el analista de estudios y su esposo/a o familiares que dependen financieramente de dicho analista, no mantendrán intereses en los valores recomendados en este informe (“como “intereses” se incluyen la titularidad directa o indirecta de los valores).

El analista de estudios no está contratado por JME Financial Services (Pty) Ltd. Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..

Las leyes de la República de Sudáfrica regirán cualquier reclamación relacionada o que surja de los contenidos de la información/estudio proporcionado.