Wall Street will continue to rally at the start of this week, after closing flat on Friday but securing the best weekly performance in months. Last week, stocks surged on investor hopes that Democrats would not have full control over Congress. On Monday morning, stock futures are surging after Democrat candidate Joe Biden was declared the winner of the election.
On Saturday, the votes counted in Pennsylvania confirmed Biden’s victory after he obtained more than the 270 Electoral College votes required to secure the presidency for the next four years. Still, incumbent President Donald Trump doesn’t want to give up and contests the results in several states.
Stay on top of the markets with Swissquote’s News & Analysis
At the time of writing, futures on Dow Jones are up 1.41%, and the S&P 500 futures have increased by 1.75%. Nasdaq and the S&P 500 indexes are very close to updating their record highs. Still, the bullish stance can be capped amid a surge in COVID infections in the US, which could end up with new lockdown measures.
Meanwhile, a fresh COVID relief package to offset the economic damage is less likely to be broad, as the Senate will be divided and Democrats won’t be able to push their $2.4 trillion stimulus bill.
In Asia, stocks are rallying in early trading on Monday, as the official confirmation of Joe Biden’s victory boosted markets. Asian stocks have gained more than 7% during the last week, which is the biggest weekly gain since April.
Biden said during a Saturday speech that he would work to unite people and he didn’t see blue states and red states.
At the time of writing, China’s Shanghai Composite is up 1.89%, and the Shenzhen Component has jumped 2.40%. Yesterday, China released trade data for October, according to which exports rose 11.45% y/y and the trade balance increased to $58.44 billion, both topping analysts’ estimates. Nevertheless, imports grew 4.9%, which is less from the expected growth of 9.5% and September’s 13.2% figure. Tomorrow, China will release inflation data.
Hong Kong’s Hang Seng Index has gained 1.42%.
Japan’s Nikkei 225 closed 2.26% higher. Japan’s Cabinet Office said earlier today that a key economic indicator rose for the fourth consecutive month in September, which shows that the relief measures have a positive impact. The index of coincident economic indicators, which touches upon factory output, retail sales, and employment, increased by a preliminary 1.4 points to 80.8 in September. Prime Minister Yoshihide Suga is about to announce a plan for more stimulus to support the economy damaged by the COVID crisis.
In Australia, the ASX 200 rose 1.75%. South Korea’s KOSPI is up 1.17%, and India’s Nifty 50 has gained 0.90%.
In the commodity market, oil prices are also surging following Biden’s victory, after tumbling about 4% on Friday. Both WTI and Brent are up about 2.8%, trading at over $38 and $40.50, respectively. Crude prices are also benefiting from a weakening dollar. Still, worries about weak demand amid an increasing number of COVID cases persist. The number of cases topped 50 million globally.
Gold continues its bullish path on Monday, joining other markets that rally on Biden’s victory. The metal is up 0.50% to $1,961, hitting the highest since mid-September.
In FX, the US dollar is extending its decline against majors, after suffering the worst week since March. The USD Index is down 0.03% to 92.200, close to the lowest level in 10 weeks. Biden’s victory has buoyed trade-exposed currencies, as investors hope that a milder White House would support global commerce while Fed’s policy will keep easy. The Chinese Yuan rose in pair with the USD to the highest in 28 months.
Elsewhere, NZD/USD increased to the highest in 19 months. EUR/USD is up 0.13% to 1.888.
The pound is up versus the dollar and slightly down against the euro as serious gaps remain in the trade talks between the UK and the EU.
