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What Wall Street feared is becoming a reality at least in the first results of the US elections. And it is that the vote count is realizing that the election of the new North American president it will be narrow, opening the door to the uncertainty that this generates.
At this time Wall Street leaves behind the profits with which they ended the official trading day. According to data from Bloomberg, New York Stock Exchange futures are trading lower with the Dow Jones falling 1.2% and the S&P 500 falling 0.6%.
“Investors were expecting quick clarity or massive fiscal stimulus and those hopes are dwindling,” Pacific Life Fund analyst Max Gokhman told Bloomberg.
Copper also changed the trend. The futures of Chile’s main export product changed the trend and fell 1.5% and stay at US $ 3.04 a pound on the Comex. For reference, before the count, the metal contract exceeded US $ 3.10 a pound.
Metals had benefited in the last few days considering that a Biden triumph opened the possibilities that the relations of the US and China would improve, motivating the global economic recovery.
The official closing of the session
Before the vote count, investors ended the day betting on risky assets such as stocks to the extent that at that time the surveys benefited the Democratic candidateTherefore, the expectations that after a clear victory the long-awaited fiscal stimulus package will finally be released were enthusiastic.
At the official close of the day in Wall Street the Dow Jones lowered the curtains with a rise of 2.06%, the S&P 500 rising 1.78% and the Nasdaq 1.85%.
But now “the best is coming” the operators advanced. And it is that to the extent that at night the results are known, off-wheel operations will come to life and investors will seek to take advantage of the abrupt movements that are anticipated. Experience says so, and it is that in the last elections, the surprise that Trump gave way that in the early morning the Mexican peso suffered a strong depreciation and gold rose with massive purchases seeking refuge.
Market analysis
In the market They are betting on a victory for former vice president and Democratic candidate Joe Biden. From Julius Baer they mention that “in opinion polls, Democrat Biden maintains an overall advantage. More importantly, he continues to lead in most undecided states, although lately the gap has narrowed in most of these states.”
The Swiss bank points out that the most likely scenario is that there is a Democratic victory in Congress, taking into account that the House of Representatives and a third of the US Senate are also renewed.
It may interest you: Elections in the US: Who benefits the Chilean market the most? Trump or Biden?
Julius Baer’s economist David Meier notes “this scenario would have the biggest political impact, with Biden’s agenda promising more public spending, combined with corporate tax increases and re-regulation. As in the status quo, where the continuity promises less drag on regulation and tax increases, this scenario is favorable to growth. “
Now, the market expects it to be a high turnout and fairly close election. In fact, some agents expect that the final result is not known tonight as millions of Americans voted by mail and in some states the count can only be done once the electoral process is closed.
Thus, some analysts remember the 2000 elections, when Bush clashed with Al Gore and ended up with the Supreme Court intervening. Markets around the world were agitated during the delay in 2000 and turned red at the time.
Therefore, the from Barclays said that “We believe that a convincing victory for either candidate would be positive for the market in the short termas it would eliminate the tail risk of a contested result. “
Barclays head of European equities strategy, Emmanuel Cau, recalled that in the 2000 elections, Old Continent and US stocks fell by around 10% the following month, while bond yields fell.
It may interest you: The women who would lead the US economic agencies in a Biden government
Stock market reactions
For equities in Asia, the day ended higher. Hong Kong’s Hang Seng led the gains, climbing 1.96%. Tokyo’s Nikkei climbed 1.39% and mainland China’s CSI 300 expanded 1.20%. In Asia, Biden’s victory means lowering tensions with China over the trade war.
In fact, from JPMorgan they explain that “the multilateral approach of the commercial negotiations proposed by the democrats could offer support to the assets of the emergent markets in the scene of a democratic victory”.
European stocks ended the day in positive territory. The CAC 40 in Paris advanced 2.44% and the Euro Stoxx 50 rose 2.27%. The Frankfurt DAX rose 2.55% and the London FTSE did so by 2.33%.
The good rhythm that the shares of the Old Continent are having is that they are betting on Biden as the winner, which could translate into new economic stimuli for the US and lower tariff pressure for the European market.
At the local level, the SP IPSA decoupled. The progress of the project that seeks a second withdrawal of 10% from the individual accounts of the pension funds, added to a recommendation to the affiliates to go to the less risky multi-fund generated sales on the Santiago Stock Exchange.
The national selective ended the session, contracting 1.39%. In this context, the drop of 4.51% of series A of Aguas Andinas, the drop of 4.43% of Ripley and that of 4.26% of E-CL stand out.
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