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Wall Street futures tumbled early Wednesday, signaling a dip when trading begins, after President Trump said he had won re-election against Joseph R. Biden Jr. despite several states in the field. battle had not announced results, and that he would ask. the Supreme Court to intervene in the race.
Closer-than-expected voting results in the US presidential election had already sent markets reeling, as global investors saw what some hoped was an uneven victory turned into a protracted problem. with ever-shrinking prospects of rapid resolution. Trump’s comments only added more uncertainty.
Shortly after Trump’s remarks, S&P 500 futures fell into negative territory. Futures are now targeting a 0.8 percent drop when Wall Street opens, while the Dow Jones Industrial Average was poised to drop about 1 percent.
European markets opened about 1 percent lower after Trump’s comments. Before that, Asian markets ended up mixed after a turbulent ride.
One of the biggest swings was in U.S. Treasury yields, a reliable indicator of investor nervousness. Yields fell as prices rose, indicating a greater desire to park money in a safe place.
Investors saw a clearer path Tuesday, when they priced in a relatively quick victory for Biden, the Democratic nominee. A strong victory for him and his party could set the stage for a large pandemic relief spending package in Washington early next year. That could boost the economy, boosting consumer spending and dampening growth even as coronavirus cases spike again. It would also mean large short-term deficits, which could drive up long-term interest rates.
But financial markets were shaken as traders and pundits saw early returns that pointed to a near result, increasing the chance that President Trump will be re-elected and the Senate will remain under Republican control. On the one hand, Trump’s low taxes and limited regulation have been popular with investors. On the other hand, analysts have made it clear that a divided government could hurt the chances of a large spending package. Investors may also be concerned that the delayed vote count could create a long period of uncertainty.
“You are not seeing as big a blue wave as was originally predicted,” said Gregory Daco, chief US economist at Oxford Economics, around 11 pm New York time.
In Japan, the Nikkei was up 1.7 percent, but other markets in the region were less encouraged after a turbulent trading day.
Yields on 10-year Treasuries were down nearly 8 percent in Asian trading.
Among the non-scientific indicators, two Chinese stocks rose along with polls based on their names. A company called Wisesoft, whose name in Chinese sounds like “Uncle Trump wins wisely,” jumped more than 7 percent at one point on the Shenzhen City Stock Exchange.
Another Shenzhen stock, Garment of Zhejiang Giuseppe, fell more than 1 percent earlier in the day. His name in Chinese sounds a bit like “Joe Biden” if pronounced over a squeaky phone line.
Voters in Florida approved a ballot measure Tuesday that would raise the state’s minimum wage to $ 15 by 2026.
Florida becomes the eighth state in the country to enact a minimum wage of $ 15, according to the National Conference of State Legislatures, but the first one won by Donald Trump in the 2016 presidential election. The District of Columbia has also enacted a $ 15 minimum wage.
Florida’s measure, known as Amendment 2, won a spot on Tuesday’s ballot in December and needed at least 60 percent of the vote to pass. With 99 percent of the votes counted, the measure had just over 61 percent.
Under the measure, the state minimum wage would increase from its current hourly rate of $ 8.56 to $ 10 in September, and then increase by $ 1 each September through 2026. After that, the annual increases would be tied to inflation.
A study by the Florida Policy Institute, an think tank backing the increase, found that the higher salary would directly benefit 2.5 million workers in the state.
Several studies have found that modest increases in the minimum wage have not led to significant job losses. But economists caution that the effects on employment depend on the size of the increase relative to the pay scale of a city or state.
That could make a $ 15 minimum wage more expensive in a state like Florida, where wages tend to be substantially lower than wages in other states that have enacted a $ 15 minimum wage.
Sandwiched between Tuesday’s election and Friday’s October jobs report, the Federal Reserve is poised to announce its November policy decision.
There’s a good chance the central bank will stay low at Thursday’s meeting, both because of the murky economic outlook and because the Fed is politically independent and will want to avoid inserting itself into the electoral fabric.
“I don’t think they want to get into anything political, much less political,” said Gregory Daco, chief US economist at Oxford Economics. While President Jerome H. Powell is sure to face election-related inquiries in his webcast press conference, he is likely to avoid them.
“I’m sure you are preparing in front of a mirror right now to answer some of these questions,” Daco said.
The Fed cut interest rates to near zero in March and has been buying about $ 120 billion in government-backed bonds per month to calm markets and support demand. Officials are expected to discuss their future bond buying plans at this meeting, but economists hope they will put off important decisions as the economy’s path remains wildly unstable.
Manufacturing data has shown a recent improvement. Spending on goods has been strong, driven by hidden savings earlier in the year, even as expanded unemployment benefits have expired and small business loans have dried up. However, the situation could darken as consumers drain their savings and coronavirus cases rise, and the pace of job earnings is already slowing.
Economists in a Bloomberg survey estimate that employers likely recovered or added 600,000 workers in October, a relatively small number compared to the millions of Americans still out of work.
Fed officials have historically received figures for key positions from the White House Council of Economic Advisers ahead of their release Friday morning. But the secure fax containing that data is typically sent late Thursday afternoon, a person familiar with the process said. Officials will not know the October numbers before their meeting.
No matter who is elected, the next president will face an economy that is still reeling after last spring’s shutdowns. Some areas have recovered, but others remain deeply depressed and millions of Americans are still out of work.
