Tech Shares Best Day Since April – E24

Wall Street rose dramatically, despite political uncertainty as a result of the US presidential election going smoother than many had thought.

US stocks were up early on, before rising in the afternoon. Here’s how the major New York stock indices closed:

• Dow Jones rises 1.34 percent
• S&P 500 up 2.20 percent
• Nasdaq Composite rises 3.85 percent

The latter index has not risen any further since April 14, Infront figures show.

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– Much

Apple and Amazon are among the stocks that rose sharply, with gains of 4.1 and 6.3 percent. Facebook and Google owner Alphabet were up 8.3 and 6.1 percent, respectively.

Portfolio manager Anders Tandberg-Johansen of the DNB Teknologi fund said Wednesday night that it looks like Biden will win and that Republicans will control the Senate.

He notes that the Nasdaq index rose about 4.5 percent at the most on Wednesday.

– It is a lot, and corresponds to half of the annual profitability, says the manager through an email to E24. Assumes an annual return of 9 percent.

The fund that leads so far this year has risen 15.4 percent through Tuesday, that is, not including today’s tech party on Wall Street. The average return for the past three years is 18.77 percent.

Tandberg-Johansen points to two possible explanations for the current rally in tech stocks:

1. Long-term interest rates are falling as Republicans in the Senate are more likely to block Biden’s big blue packages, including tax increases. This is good for growth stocks that have earnings on time.
2. Republicans are seen as wanting less regulation of “big technology” than Democrats.

Players bet on Biden

Technology stocks have risen throughout much of the pandemic and have almost gained “safe haven” status in turbulent times, such as now with an unresolved election result in the United States.

At the same time, tech companies have feared that Joe Biden would subject them to scrutiny for tax purposes, but now that Donald Trump and the Republicans are doing better in the election than many expected in advance, it contributes to the relief of stocks. technological.

The election thriller in the US has an effect on everything from stocks to currencies to oil prices, but the biggest backlash is in the bond market. “The world’s most important interest rate,” the 10-year-old American, has dropped dramatically compared to yesterday.

This puts pressure on the major banks, which will be hit by lower revenues if interest rates fall. JP Morgan and Bank of America fell 3.1 and 4.1 percent, respectively. However, several bank stocks rose sharply on Tuesday.

In the betting market, the label favorite changed from Biden to Trump overnight, but on Wednesday morning the wind changed again and Joe Biden now remains a fairly clear favorite.

The odds of a Biden win dropped to 1.18 at Betsson on Wednesday night, while Trump’s odds of winning at the same time are 5.00.

Reduced blue wave

Pål Ringholm, head of analytics at Sparebank 1 Markets, noted Wednesday that the chances of Joe Biden and the Democrats clearing the table in the presidential election and the elections to the two houses of the National Assembly have weakened significantly.

– It is the case that the great blue wave, that is, the hope that Biden will take both the House of Representatives and the Senate, has been greatly reduced. So extra-large packages of measures, also of the eco-type, are significantly less likely, he told E24.

The key figures also come from the United States.

The number of private sector employees in the United States increased by 365,000 people in October, according to a survey by ADP Employer Services. In advance, an increase in employment of 650,000 people was expected, according to Direkt Makro.

Uber and Lift jumped

Uber and Lyft ride services rose sharply on Wall Street, with stock prices rising 14.6 and 11.3 percent, respectively. They are expected to emerge victorious from a California labor law referendum, which means companies don’t have to hire their drivers.