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Investor hopes for a decisive early reading on the US election were dashed after the mixed results of the initial vote Tuesday night, also raising questions about an easy route to a massive fiscal stimulus package.
A trader exits the New York Stock Exchange (NYSE) on Election Day in Manhattan, New York, New York, USA, November 3, 2020. REUTERS / Andrew Kelly
NEW YORK: Investors’ hopes for a decisive early reading on the US election were dashed after the mixed results of the initial vote Tuesday night, also raising questions about an easy route to a fiscal stimulus package. massive.
Republican President Donald Trump narrowly led Democratic rival Joe Biden in the vital battlefield state of Florida. Other competitive swing states that will help decide the election outcome, such as Georgia and North Carolina, remained up in the air.
“Right now, early indications are that this is closer than expected and we may not have clarity by the end of tonight,” said Keith Lerner, chief market strategist at Truist / SunTrust Advisory in Atlanta.
US stock market futures were choppy as the election results rolled in.
Markets have become obsessed in recent weeks with the prospects of massive fiscal relief stimulus to help the economy rebound from the coronavirus pandemic that has killed more than 230,000 Americans.
A “Blue Wave” sweep that sees Biden win and Democrats capture the United States Senate has been seen as the surest path to a massive tax package.
“The market has been dramatically reversing some of these Biden Blue Wave deals from the day before,” said Alan Ruskin, chief international strategist at Deutsche Bank in New York. “If you look at the polls so far, it’s still up for grabs.”
Republican Senator Cory Gardner was defeated in Colorado, giving the Democrats their first victory in a dozen Republican-controlled Senate seats.
Investors have said that any result denoting a clear winner, regardless of who wins, could stabilize the markets, who have been wary that the race is too close to being called or contested, a situation seen as widely negative for the markets. .
“That is my biggest fear, that when the day of the inauguration arrives we will not have a president,” said David Tawil, president of Maglan Capital in New York. “The one thing all investors are praying for is that in a short period of time there will be a clear winner because anything else (besides that) would be catastrophic.”
Chart – Increase in world market capitalization in the last four years: https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkjmoovm/Pastedper cent20imageper cent201604323646730.png
(Report by Lewis Krauskopf; additional report by Ira Iosebashvili and Megan Davies; edited by Lincoln Feast).
