Biden Wins: What is Happening in the Market?
Joe Biden has won the 2020 US presidential election. Biden has won more than 73 million votes, the most ever for a US presidential candidate. Meanwhile, vice president-elect, Kamala Harris has made history as the country’s first Black, South Asian, and female VP.
Following Biden’s projected to win the CEO of one of the world’s largest independent financial advisory organizations, said that the president-elect will boost global markets and economies.
“President-elect Joe Biden will deliver a boost to global stock markets and the US and world economy,” Nigel Green, CEO, and founder of deVere Group said.
Let’s look at the impact of Biden winning the election:
Dollar Weakens on Biden Win:
The dollar weakened in early European trade Monday, as traders looked to riskier currencies to play Joe Biden’s victory in the U.S. presidential election amid hope for more fiscal largesse and continued easy monetary policy.
At 3:05 AM ET (0805 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 92.172, falling to its lowest level since early September.
EUR/USD rose 0.1% to 1.1889, a two-month high, USD/JPY rose 0.2% to 103.50, while the risk sensitive AUD/USD rose 0.5% to 0.7290, a seven-week high.
The Chinese yuan struck a 28-month peak, the New Zealand dollar rose 0.6% to hit a 19-month high and the Australian dollar made a seven-week top as the dollar index fell to its lowest since early September (=USD).
Sterling hit its highest in more than two months while the euro (EUR=) rose 0.1%, extending an almost 2% gain from last week to hit a two-month high of $1.1895.
The buoyant mood sent equities surging and the safe-haven Japanese yen slipped a fraction to 103.42 per dollar – just below an eight-month high made on Friday when the dip in U.S. yields deterred investment flows from Japan.
The yuan, particularly sensitive to the election outcome because of a perception that Biden will take a softer or more predictable line on China, was also boosted by strong Chinese trade data over the weekend to stand at 6.5758 per dollar.
The South Korean won hit a 21-month high of 1,115.33 per dollar and the Mexican peso rose 0.7% to 20.3980 per dollar, its highest since March.
Oil prices rose more than 2% on Monday, with Brent futures topping $40 a barrel after Joe Biden clinched the U.S. presidency and buoyed risk appetites, offsetting worries about the impact on demand from the worsening coronavirus pandemic.
Brent crude futures (LCOc1) for January climbed 94 cents, or 2.4%, to $40.39 a barrel by 0710 GMT, while U.S. West Texas Intermediate crude (CLc1) for December was at $38.07, up 93 cents, or 2.5%.
Gold was up on Monday morning in Asia as the results from the U.S. presidential election confirmed a Democrat win. A weaker dollar pushed gold prices up over the weekend.
Gold futures were up 0.69% at $1,965.15 by 12:28 PM ET (4:28 AM GMT). The dollar was down on Monday.
U.S. stock index futures rose on Sunday after President-elect Joe Biden was declared the winner in a highly contentious election.
Biden’s victory in Pennsylvania on Saturday put him above the 270 Electoral College votes needed to secure the presidency, four days after Election Day, although President Donald Trump does not plan to concede anytime soon.
S&P 500 e-mini futures were up 34.5 points, or 0.99%, Dow e-minis <1YMcv1> were up 277 points, or 0.98%, and Nasdaq 100 e-minis were up 147.25 points, or 1.22%.
European stock markets are seen opening firmly higher Monday, as investors take on more risk now the uncertainty of the U.S. presidential election appears to be over and more fiscal stimulus looks likely.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 1.7% higher, CAC 40 futures in France climbed 1.5% and the FTSE 100 futures contract in the U.K. rose 1.2%.
Japan stocks were higher after the close on Monday, as gains in the Paper & Pulp, Railway & Bus, and Real Estate sectors led shares higher.
At the close in Tokyo, the Nikkei 225 rose 2.12% to hit a new 5-year high.
The best performers of the session on the Nikkei 225 were Honda Motor Co Ltd (T:7267), which rose 9.42% or 244.0 points to trade at 2833.5 at the close. Meanwhile, Mitsui Engineering & Shipbuilding (T:7003) added 8.12% or 28.0 points to end at 373.0, and Comsys Holdings Corp. (T:1721) was up 6.51% or 184.0 points to 3010.0 in late trade.
Asia Pacific stocks were up on Monday morning in Asia, continuing their gains as Democrat Joe Biden clinched victory in the state of Pennsylvania on Sunday, winning the U.S. presidential election against incumbent President Donald Trump.
China’s Shanghai Composite gained 1.83% by 11:21 PM ET (3:21 AM GMT) and the Shenzhen Component rose 1.90%. Trade data for October released on Sunday showed that exports rose 11.45 year-on-year and the trade balance rose to $58.44 billion.
S&P 500 Futures:
Contracts on the S&P 500 rose 0.9% as of 6:33 p.m. in New York. The underlying index rallied 7.3% last week in the biggest advance since April. Nasdaq 100 futures jumped 1.2%, while Dow Jones Industrial Average contracts gained 0.7%.
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