Shares Slip When Biden Announces VP

Dow Jones, Nasdaq 100, S&P 500 Price Outlook:

• The Dow Jones, Nasdaq 100 and S&P 500 all closed in red as yields jumped and gold stumbled
• Another lower close for the Nasdaq marks the third consecutive daily loss, the first such streak since March
• Will Kamala Harris’ selection noticeably affect markets as if the selloff was just coincidental?

Dow Jones, Nasdaq 100, S&P 500 Forecast: Stock market slips as Biden announces VP

The Dow Jones, Nasdaq 100 and S&P 500 fell sharply short to mark an unusual day of price action. Gliding and silver price slips, a US Dollar flip-flop and rising yields were some of the other notable developments, all of which took place earlier in the session. The catalyst behind these moves has been widely argued, but an announcement by Democratic presidential candidate Joe Biden could take the last half of the week into the center stage.

In a Tweet shortly after the market closes, Mr Biden announced California Senator Kamala Harris as his vice-president-elect, despite their clashes in previous debates. While the role of vice president is typically limited, Wall Street may have reservations about some of the policies that Harris intends to pursue when she is elected. Provisions of tax cuts and a new tax imposed on financial trading transactions are two of the most prominent proposals that could ruffle fires on Wall Street.

Since some Americans believe, if elected, that Biden will soon step in to take Harris at the helm, their policies may fall under greater control than normal. However, election night is some distance away, so both candidates and their running societies will have a good chance of further elaborating their economic policies and their tax intentions. Thus, it is too early to say with certainty that the declines are due to Harris on the Biden ticket, but a follow-up in the days ahead could begin to prove the argument.

Nasdaq 100 Price Card: 4 – Hour Time Frame (April 2020 – August 2020)

However, the Nasdaq 100 is on precarious footing above an area that has previously affected price. Teetering above 10,900, a daily close below the level could open the door for further loss, making the technical landscape rather restless. If broken, the subsequent support could materialize at combined support around 10,600. In the meantime follow @PeterHanksFX on Twitter for updates and analysis.

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– Written by Peter Hanks, Strategist for DailyFX.com

Get in touch and follow Peter on Twitter @PeterHanksFX