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© Reuters By Yasin Ebrahim
Investing.com – The Dow Jones rose Tuesday as value stocks racked up gains in hopes that a victory by Vice President Joe Biden will ensure the deployment of a more generous stimulus package to inject power into the economic recovery.
He was up 2.06%, or 554 points. He was up 1.73% while adding 1.85%.
As American voters hit the polls, Biden has an edge over President Donald Trump in key states like Arizona, Florida, Pennsylvania and Wisconsin, according to the New York Times / Siena College poll.
“If Biden succeeds in securing one of those three states (especially Florida or North Carolina), Donald Trump’s chances would drop dramatically,” ING said in a note. In other words, while there is a high risk of a result delay, there is also a material possibility that Joe Biden has virtually achieved a victory at 03:00 EST (08:00 GMT) if the results show that he is clearly ahead in those states. “
In recent months, Wall Street has suggested that a Biden win would be good for value stocks, as the economy will get a boost from a larger stimulus package, easing the impact of higher taxes and plans to expand coverage. public health care.
Biden has suggested raising taxes from 20% to 28%, though it would still be below the 32% rate seen before Trump took office.
Others, however, suggest that a blue wave – Democrats taking control of both the White House and Congress – may lead the Fed to raise rates again.
The effect of a blue wave “could bring the first Fed rate hike from 2024 to 2025 and perhaps from 2023 to 2024.” Morgan stanley (NYSE 🙂 said.
Industrial and consumer discretionary stocks are among the top gains.
Financials were driven higher by bank stocks as they rose in hopes that the pace of electoral uncertainty could refocus lawmakers’ efforts on policies that would ensure that the economic recovery remains on track.
JPMorgan Chase (NYSE 🙂 and Citigroup (NYSE 🙂 closed 3% higher, while Bank of America (NYSE 🙂 was up 2%.
The bullish move in banks helped alleviate weakness at PayPal (NASDAQ 🙂 after better-than-expected results from the fintech giant were offset by earnings guidance that disappointed Wall Street.
In other revenue news, cash-strapped AMC Entertainment (NYSE 🙂 was up 9% despite reporting broader-than-expected quarterly earnings after a 90% drop in revenue.
“We credit AMC for relentlessly seeking ways to improve its net debt position and stay afloat. However, we do not expect support levels to begin to normalize until mid-2021, which presents a real risk to the industry, and to AMC in particular, ”Wedbush said in a note as he lowered his target price for the share to 2 , 50 dollars from 4 dollars. .
Technology also played a role in the broader market move, as the Fab 5 built on its rally on Monday.
Amazon.com (NASDAQ :), Apple (NASDAQ :), Facebook (NASDAQ :), Google-parent Alphabet (NASDAQ 🙂 and Microsoft (NASDAQ 🙂 earned more than 1%.
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