Markets Stocks Head Toward Record High on Biden Optimism

Updated: Nov 19, 2020

Global equities headed for a record high amid optimism about the outlook under a Joe Biden presidency. The dollar extended declines.

Last week’s embrace of risk continued Monday after Biden was declared the winner of the U.S. election over the weekend. S&P 500 futures rose more than 1.5%, building on the strongest week since April for the benchmark, as the president-elect launched his transition effort. Contracts on the tech-heavy Nasdaq 100 index, which have outperformed since Tuesday’s vote, were up more than 2%. There were also broad-based gains across Asia Pacific and European futures pointed higher.

The yuan and euro ticked higher alongside the Australian and New Zealand dollars. Treasuries were steady and oil pared some of Friday’s slide. Turkey’s lira rose after the installment of a new central bank chief.

Biden in his victory speech promised swift action against the pandemic and an orderly transfer of power, though President Donald Trump is weighing legal challenges and has so far refused to concede. As of Sunday there was a growing sense among Trump’s allies that he’d lost.

Markets will probably judge that “this is no longer a contested election, that a delay even of the election result is not there either,” Ben Emons, managing director of global macro strategy at Medley Global Advisors, said on Bloomberg TV. “The first order of business Monday morning will really be about reassessing what the policy will be under a Biden presidency in terms of domestic and foreign policy,” he added.

With global equities heading for an all-time high closing level and coming off their best week since April -- they rose more than 7% -- investor focus will likely return to the global economic recovery. That remains under threat from the resurgent coronavirus, with worldwide cases of Covid-19 surpassing 50 million.

The U.S. reported more than 100,000 new infections for a fourth consecutive day. Total U.S. cases neared 10 million with no slowdown in sight. Japan is facing rising infections in the northern island of Hokkaido.

Meantime, Chinese trade data over the weekend showed Asia’s largest economy is continuing to recover.


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