Benchmark Treasury yields touched 1% for the first time since March, European stocks rose and the dollar slid on speculation that Democrats could win the U.S. Senate.
Cyclical assets, such as U.S. small-cap stock futures and European energy shares, posted strong gains as investors bet that a Democrat-controlled Congress would deliver a bigger economic aid package. Bitcoin surged past $35,000 to hit another all-time high.
Nasdaq 100 futures sank more than 2% on worries that big technology companies will face tougher antitrust scrutiny from Democrat lawmakers.
Television networks projected Democrat Raphael Warnock ousted incumbent Senator Kelly Loeffler in one of the two Senate runoffs, lifting the party’s hopes for retaking the chamber. Some strategists argue that a Democratic double win would mean additional stimulus, tax hikes and more regulation, though the party could still face legislative obstacles.
In the short term, the pandemic is taking a back seat to political developments in the U.S. Democrats taking control of both houses of Congress could potentially lead to upward pressure on inflation and interest rates, as well as higher taxes to pay for more fiscal aid. Conversely, should either Republican incumbent win re-election, the party would have enough votes to impede President-elect Joe Biden’s policy platform.
Traders now see U.S. inflation averaging at least 2% per year over the coming decade, based on the 10-year breakeven rate, a measure that draws on pricing for inflation-linked Treasuries. Bond investors are also factoring in a greater chance of a Blue Sweep in the Senate runoff, with the U.S. yield curve steepening to multi-year highs.
“A dual win should lead to a steeper curve and a weaker dollar as the fiscal situation would be seen as unsustainable, but it would also be welcomed by the equity market, particularly cyclicals, while in growth pressure might appear on the monopolistic Internet giants,” Sebastien Galy, senior macro strategist at Nordea Investment, said in a note.
Meanwhile, tensions between the U.S. and China ratcheted up with Trump’s order banning U.S. transactions with Chinese payment apps. Earlier, the New York Stock Exchange decided to reconsider its decision to halt the delisting of three major Chinese telecommunications firms after Treasury Secretary Steven Mnuchin told the Big Board he opposed its shock announcement to grant the companies a reprieve.
What to watch this week:
- U.S. Congress meets to count electoral votes and declare the winner of the 2020 Presidential election Wednesday.
- FOMC minutes out Wednesday.
- U.S. unemployment report for December is due Friday.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 Index decreased 0.7% as of 8:24 a.m. London time.
- The Stoxx Europe 600 Index gained 0.1%.
- The MSCI Asia Pacific Index was little changed.
- The MSCI Emerging Market Index rose 0.2%.
Currencies
- The Bloomberg Dollar Spot Index decreased 0.1% to 1,114.46.
- The euro climbed 0.2% to $1.2324.
- The British pound increased 0.1% to $1.3635.
- The Japanese yen weakened 0.1% to 102.80 per dollar.
Bonds
- The yield on 10-year Treasuries gained five basis points to 1%.
- The yield on two-year Treasuries gained one basis point to 0.13%.
- Germany’s 10-year yield increased six basis points to -0.51%.
- Britain’s 10-year yield gained four basis points to 0.247%.
Commodities
- West Texas Intermediate crude was little changed at $49.83 a barrel.
- Gold was little changed at $1,949.26 an ounce.
— With assistance by Rita Nazareth, Vildana Hajric, and Joanna Ossinger
https://ift.tt/3pR5iya
Business
Bagikan Berita Ini
0 Response to "Stock Market Today: Dow, S&P Live Updates for Jan. 6, 2021 - Bloomberg"
Post a Comment