A Winner is Declared: Mr. Market

  • The S&P 500 index rose 1.95% to 3510.45 points
  • The German DAX30 rose by 242.38 points, the British FTSE rose by 19.44 points, and the French CAC40 rose by 61.14 points
  • The Nikkei 225 index rose 1.73% to 24,105.28 points, and the South Korean KOSPI index rose 2.40% to 2413.79 points

As investors bet that the Republican Party will continue to control the Senate, and prevent any major policy adjustments that may suppress corporate profits after Democrat Joe Biden enters the White House, US stocks maintained a continuous upward trend. Wall Street’s post-election gains boosted global investor confidence.

Stock exchange graph

The S&P 500 index rose 1.95%, to 3510.45 points. The Nasdaq rose 2.59%, to 11890.93 points. The Dow rose 1.95%, to 28390.24 points.

European stock markets also set a record for nearly two weeks. That was thanks in large part to to strong corporate quarterly reports, and new stimulus boosts in the UK economy hit by the new coronavirus epidemic.

The German DAX 30 rose by 242.38 points, the British FTSE rose by 19.44 points, and the French CAC40 rose by 61.14 points. The Nikkei 225 index rose 1.73%, to 24,105.28 points, and the South Korean KOSPI index rose 2.40% to 2413.79 points.

The WTI December crude oil futures settlement price closed down 36 cents, to $38.79 per barrel. Brent’s January crude oil futures settlement price closed down 30 cents, to $40.93 per barrel. The COMEX December gold futures price on the New York Mercantile Exchange rose $50.60 over the previous trading day, to close at $1,946.80 per ounce, an increase of 2.67%.

Results from Tuesday’s elections in the United States continue to trickle in, and analysts believe that the surge in global stock markets is a recognition of the current split in the United States. There is no clear political winner yet, there is only one winner: “Mr. Market.”

President Donald Trump’s campaign team said it has already filed lawsuits in Michigan, Pennsylvania and Georgia. On the morning of November 5 local time, it was announced that a lawsuit was filed in Nevada, alleging “voter fraud.”

However, legal experts believe that Trump’s lawsuits are unlikely to affect the results of the US election. The lawsuits are designed to delay vote counts and postpone the announcement by the media.

Multiple Economic Data Released

In the Eurozone, retail sales in September decreased by 2% from the previous month, expected to decrease by 1.5%. The previous value decreased by 4.4%. A year-on-year increase of 2.2%, is expected to increase by 2.8%, and the previous value increased by 3.7%.

The number of American challenger companies laid off in October was 80,666, which was lower than the previous value and expected value of 118,800. Employment Data Corporation said that most of the industries in the United States that announced layoffs this year are restaurants, hotels, bars, and physical retail stores.

Except for entertainment and retail, other industries have laid off tens of thousands of employees, indicating that the impact of the epidemic is expanding. The number of initial claims for unemployment benefits in the United States only dropped slightly last week, which further shows that as the new coronavirus epidemic intensifies, and fiscal stimulus measures are over, economic recovery is losing momentum.

The US Department of Labor announced that as of the week of October 31, the number of initial jobless claims decreased by 7,000 after seasonal adjustments to 751,000. A Reuters survey estimated that the number of initial jobless claims was 732,000 last week.


Federal Reserve to Leave Interest Rates Unchanged

On Friday, the Federal Reserve announced that the latest interest rate resolution, the benchmark interest rate maintained at 0% -0.25%, would remain unchanged. The excess reserve rate remained unchanged at 0.1%, the discount rate remained at 0.25%, also unchanged.

This move is in line with market expectations. Federal Reserve has sought to use easing to stimulate growth, although officials have in recent months warned that more work needs to be done in financial terms.

In the third quarter, the U.S. GDP recorded the fastest growth rate in history, rising 33.1% annually, compared with a 31.4% contraction in the previous quarter. At least 11.4 million of the 22 million jobs lost in March and April this year have been restored, but wage growth has slowed in recent months.

Fed Chairman Jerome Powell said that more stimulus measures are needed to help the U.S. economy. He avoided discussions about politics and elections, saying that although the U.S. economy performed better than expected, the outlook was “very uncertain,” and warned that although the economy is growing, “the pace of improvement has slowed.”

The US economy has only recovered half of the number of unemployed in March and April.

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Doris Mkwaya

I am a journalist, with more than 12 years of experience as a reporter, author, editor, and journalism lecturer." I've worked as a reporter, editor and journalism lecturer, and am very enthusiastic about bringing what I've learned to this site.  

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