File photo: Taipei, 10 August Gust, 2011 A man eats lunch of noodles while monitoring stock market prices inside a brokerage. Reuters / Pichi Chuang / File photo
November 9, 2020
By Swati Pandey
SYDNEY (Reuters) – Stocks rallied, oil prices soared and the US dollar weakened on Monday on expectations of less regulatory reforms and more monetary stimulus to support risk appetite under US President-elect Joe Biden.
The Democratic candidate’s election victory was already priced by the markets, which had been trading since last week from the point of view of Biden’s president and the Republican-controlled U.S. Senate.
S&P 500 e-mini futures jumped more than 1.5% on Monday while Nasdaq futures signaled a positive start for US markets with a gain of more than 2%.
Eurostox 500 futures are up 1.7%, Germany’s DX futures are up 1.8% and FTSE futures are up 1.4%.
The mood was also upbeat with all the major indicators of greenery in Asia.
Outside of Japan, MSCI’s broadest index of Asia Pacific shares rose 1.4% to 614.73 points, the highest since January 2018. It rose 6.2% last week to its best weekly performance since early June.
Dave Wang, portfolio manager at Singapore’s Nuvest Capital, said that while there was a lot of focus on Trump vs. Biden, the markets reacted strongly to the (potential) split Congress, which meant more confidence that interest rates would remain low for a long time. Said Dave Wang, portfolio manager at Nuvest Capital.
Especially in China and North Asia, emerging markets now have the best opportunities. I believe that the pace of earnings and valuation puts China in a very attractive risk / reward position.
Chinese stocks started higher with the blue-chip CSI 300 index hoping for better Sino-US relations under Biden.
Japan rose 2.4%, while Australia, Australia, Hong Kong and South Korea rose 1 per cent. An increase of 1.5%.
According to Tapas Strickland, an analyst at National Bank of Australia, S&P with equities &. W. Made a strong boom.
However, Australian Australian fund manager Perpetual’s Matt Sherwood said Biden’s victory did not guarantee a change in his portfolio.
“In the end, we think the U.S. economy is still fragile and growth is slowing,” Sherwood said.
“You’re likely to be able to gravitate your portfolio toward high-beta-type markets, such as pot-filling markets, and are likely to have better potential in energy spaces than places built with a Democrat clean sweep.”
Biden’s victory was boosted by oil prices on Monday as investors raised concerns about declining demand amid rising global coronavirus cases.
Brent crude added .4 1 to .4 40.48.
Analysts said the outlook could be tougher here as investors focus on Biden’s ability to expand monetary stimulus and measures to reduce the spread of COVID-19.
The number of new coronavirus infections was reported in the United States last week, with a total of 100 million cases.
Jim Wilding, US-based asset manager at Conference Financial Partners in Pennsylvania, added a cautionary tale considering the S&P 500 is not usually far from equity valuation at key levels.
“While we remain positive on the medium-term outlook and believe that a divided government reduces the likelihood of a bear case, we will stay away from unbridled enthusiasm at the current level.”
Despite the split government, a monetary stimulus plan is still possible, analysts said, although a larger package is unlikely. The U.S. Will focus more on strengthening the world’s largest economy on the Federal Reserve.
As a result, the dollar has weakened in recent days while growth proxies such as the Australian Australian dollar have rallied with the Biden president, making trade less likely.
The US dollar was mostly flat against the yen at 103.36 after slipping about 1.3% last week.
The USS capped a 1-1 / 2 month high of 7 0.7297, jumping last week as jump.ed% as open currencies in trade took advantage of Biden’s predicted victory.
Investors will also focus on sterling and the euro this week, with Brexit trade talks with the EU summit on November 15.
Days later, the Bank of England’s chief economist will give a talk on the ‘economic impact of the coronavirus and its long-term effects for the UK’.
The euro, which had gained 1.9% last week, was shaded at 1.1891 on Monday. Sterling rose 0.2% to 3 1.3183.
Graphic – Asia Stock Markets: https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH
Graphic – Asia-Pacific Appraisal: https://product.datastream.com/dscharting/gateway.aspx?guid=80e5bbdc-eae6-4b37-bc49-a2d8056b75de&action=REFRESH
(Reporting by Swati Pandey in Sydney; Additional reporting by Tom Westbrook and Mitchell Price; Editing by Sam Holmes and Christopher Cushing)
