Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Here’s What Market Watchers Say About the Election

PoliticsNov 04, 2020 00:36
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

(Bloomberg) -- It’s still early on U.S. election night, with some easy wins for both sides in the bag but many results yet to be decided.

Still, investors haven’t been sitting aside as votes are counted amid volatile markets. S&P 500 futures have swung between a gain of 2.1% and a loss of 1%. The yield on 10-year Treasuries fell as low as 0.79%, a decline of 11 basis points, before paring the drop. The Bloomberg Dollar Index rallied 1% before giving up some of the gains.

Here’s what some market watchers are saying:

Long S&P/Short Nasdaq

Rising stocks, a stronger dollar and higher Treasuries mean “higher Trump pricing, ‘America First,’ less fiscal stimulus, less taxes,” said Nader Naeimi, head of dynamic markets at AMP (OTC:AMLTF) Capital Investors Ltd. in Sydney. “Nasdaq futures directly correlate with Trump winning. And as a ‘Blue Sweep’ is looking less likely, tech is rallying.”

“In my view, that’s a rally to fade,” he said. “Long S&P/short Nasdaq is how I am playing right now” as “global regulatory pressures on tech will continue to intensify no matter who wins the election and the fact that Democrats have a high chance of winning the Senate adds to it.”

Pennsylvania Is ‘Critical’

“At this point, I’m not sure the market is trading only on Trump,” said Evercore ISI strategist Dennis DeBusschere in New York. “The Senate looks increasingly likely to be Republican.”

He added that “Biden with a Republican Senate is really good for tech as well. I.e., Trump could lose and I’m not sure market internals would change from the current moves (Nasdaq 100 up, rates down etc.).”

“It looks like we will have to wait till tomorrow for an outcome. Pennsylvania is critical and we won’t get much more till tomorrow,” he said.

Caution on Conclusions

“I just would not leap to any big conclusions,” said Brian Barish, chief investment officer at Cambiar Investors LLC in Denver. “We all saw that in 2016, markets kind of did not get much right about the impact of the election in the initial hours after it was clear Trump would win.”

A Senate Democrat majority of more than 52 seats looks unlikely, he said. “That’s as much as I can see clearly,” but “it does look like a lot of (systematic) polling error again, which is an interesting story in and of itself.”

Equities Versus Bonds

“Equity markets and FX/bond markets are viewing the risk of election result delay differently,” said Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui (NYSE:SMFG) DS Asset Management Co. in Tokyo. “There is a risk-off mood as dollar appreciated and yen weakens, with expectation that the election delay could be prolonged.”

“There’s mixed reactions/views to the risk of not finding out the election outcome today,” but “either way, regardless of who wins after a possible delay, there will be an economic stimulus bill that will be a positive for the equity markets.”

Stimulus in Doubt

“If Republicans keep the Senate, expect much of the stimulus to get priced out. If the election result is unknown, I doubt we get that bill anytime soon,” said Priya Misra, head of rates strategy at TD Securities in New York.

Baby Amazons

“It seems much closer than expected. There could be a selloff from risk assets like the Baby Amazons -- such as Sea Ltd. and Pinduoduo (NASDAQ:PDD) Inc. -- and a flight to safe assets. Consumer stocks linked to e-commerce, food & beverage, and hospitality will weaken in an uncertain environment,” said Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer in Singapore.

(Corrects location of Tiruchelvam in last item.)

©2020 Bloomberg L.P.

Here’s What Market Watchers Say About the Election
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email