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What the market feared most in the US elections became a reality. And it is that the vote count revealed that the election of the new American president will be narrow, opening the door to the uncertainty that this generates.
In fact, at dawn Trump declared himself the winner of the contest and asked to stop the vote count, which is why he announced that he will go to the Supreme Court, which leaves investors more nervous.
At this time, the outlook is encouraging for Biden since he would have the votes to win some key states and thus reach the White House. Of course, Trump again questions the election.
Despite all the above Wall Street rose strongly. Why? Considering the tightness of the senatorial elections, investors are adjusting their portfolios to a scenario without great fiscal stimulus, so they go en masse again to technological actions, those that withstood the worst moments of the pandemic in good shape. But also, with a divided Congress, it is unlikely that they will be reduced – as Biden had promised- corporate tax cuts, one of the measures Trump took in 2017 and that benefited the shares.
Sample of the above is that the Nasdaq rose 3.85%. But his peers in the New York square accompanied him … the Dow Jones increased 1.34% and the S&P 500 did it in 2.29%. According to Bloomberg, the optimism at the money tables also comes because they estimate that Trump will not go to the Supreme Court to challenge the election.
In Europe investors rallied. The French Cac 40 registered an increase of 2.44%, the Euro Stoxx 50 a rise of 2.01%, the German Dax an advance of 1.95%, while the Ftse 100 of the United Kingdom and the Spanish Ibex 35 gained 1.67% and 0.45%, respectively.
In Asia, with markets already closed, the Japanese Nikkei 225 rose 1.72%, the Chinese Csi 300 climbed 0.76% and the Shanghai Comp gained 0.19%. Hong Kong’s Hang Seng lost 0.21%.
The Santiago Stock Exchange, meanwhile, did not have as good a day as its international peers. The IPSA, the main stock market indicator of the local market, fell 0.10%, to 3,518.05 points.
Cencoshopp shares fell 4.65%, Latam Airlines 3.53% and Banco Santander 3.38%.
On the other hand, CMPC’s papers rose 2.81%, those of CCU 2.38% and those of Enel Americas 2.28%.
Effect on the dollar and fixed income
According to a report by Julios Baer, the tight US election result and associated uncertainty provide short-term support for the currency.
“Once the election result is known, a divided government would support the US economy and moderately weaken the dollar. A blue wave has the potential to further influence the longer-term dollar outlook, while increasing the odds. of a faster recovery. The pending US election outcome keeps uncertainty high, supporting the dollar in the short term given its safe haven characteristics. Looking beyond short-term uncertainty, a divided government, whether under President Trump or under President Biden, it will provide moderate support to the economy and we expect the dollar to weaken, reflecting a growing appetite for risk, “the report states.
Regarding fixed income, the Swiss bank indicates that the short-term prospects for the Treasury market depend on the outcome of the US elections.
A “Blue Wave” of a Biden presidency and a Democrat-controlled Congress would open the door to higher fiscal spending and higher fiscal deficits, leading to higher growth and therefore steepening the curve performance, “they explain.
Copper down
Commodities also suffer from this uncertainty, especially when a Biden victory gave more hope of an improvement in the US relationship with China.
But with the uncertain outcome, copper loses ground on the London Metal Exchange. According to data provided by the Chilean Copper Commission (Cochilco), Chile’s main export product lost 0.64% and closed the day at US $ 3.06 per pound.
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