Cargo Facts
SUBSCRIBE
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Wednesday, February 24, 2021
Log In
No Result
View All Result
  • Aircraft Leasing
  • Capacity & Demand
  • Carriers
  • E-Commerce
  • Engines
  • Express
  • Freighter Aircraft
  • Freighter Conversions
Cargo Facts
  • NEWS
  • DATA
  • MULTIMEDIA
  • MAGAZINE
    • Issue Archive
    • Weekly Update
  • EVENTS
  • CONSULTING
Log In
No Result
View All Result
Cargo Facts
No Result
View All Result

U.S. Stock Futures Pare Gains With Election Outcome Uncertain

Bloomberg News by Bloomberg News
November 4, 2020
in News
Share on FacebookShare on TwitterShare on LinkedIn

U.S. equity futures pared gains on rising speculation that the American presidential election won’t be decided without a protracted delay and potential legal challenges.

Contracts on the S&P 500 rose 0.5% as of 11:46 p.m. in New York, cutting by three-quarters an earlier rally. Nasdaq 100 futures slashed a 4% surge by half as President Donald Trump’s chances for a surprise victory retreated from earlier highs. The dollar was also on a roller-coaster ride, surging as much as 1% before settling for a gain of 0.2%. Treasury yields slumped plunged, with the 10-year benchmark down to 0.82%.

President Donald Trump maintained an early lead in several contested battleground states that would be key to his re-election chances, while challenger Joe Biden had reason for hope in the Midwest and Southwest in his bid to take the White House. The race for control of the Senate remains up in the air. With key states likely needing some time to count mail-in ballots that will potentially decide the election, investors have started bracing for days of uncertainty.

“The idea of it pricing in a decisive result and an election that’s not going to be contested was a little premature, and we’re seeing that right now,” said Liz Young, BNY Mellon Investment Management’s director of market strategy. “It’s going to end up being a lot closer than expected and I still think the likelihood of it being disputed or contested is high.”

Nasdaq 100 and S&P 500 futures rally as results roll in

Markets have been volatile during the final weeks of the campaign as investors fretted over the potential for a contested outcome, a surge in coronavirus cases and stretched valuations that make megacap tech shares look expensive as the economic rebound starts to slow. The S&P 500 has moved at least 1% six of the past seven sessions.

While Biden’s solid lead in polls had some investors speculating there would be a relatively quick decision on who will prevail, a surge in mail-in ballots has made it more likely that some states won’t be able to declare a winner Tuesday. That exposes markets to a drawn out process for determining the next president.

Read more: Charts to watch for election hints

Adding to anxiety is that markets haven’t always been prescient in knowing what outcome they’d prefer. In 2016, Trump’s perceived recklessness was considered bad news for a stock market that detests uncertainty. Futures plunged the maximum 5% as he took the lead late on Nov. 8, 2016. By morning, as investors warmed to his pledges of cutting taxes and slashing regulations, futures had rebounded higher. The S&P 500 has rallied 57% since his surprise win.

Investors have come around on Biden as his lead solidified, banking on his promise to broker a massive aid package to jumpstart the economy hit by the pandemic. Assets seen benefiting most from a Biden administration have climbed alongside his polling lead. The Invesco Solar ETF, ticker TAN, has surged over 140% in the past six months, buoyed by optimism that Biden would boost infrastructure and green-energy spending.

Hopes of a multi-trillion fiscal aid package has boosted benchmark Treasury yields to the highest level since June, dragging beaten-down shares of financial companies higher as well. Meanwhile, the Nomura-Wolfe Biden Election Basket — a group of stocks that wagers on potential winners from a Democratic victory while betting against shares seen as losers — climbed to a record on Monday. The basket holds 30 pair trades across sectors including technology, health care, utilities and others.

But not all outcomes under Biden are considered market-friendly. He also has pledged to roll back the huge tax cuts that Trump handed corporate America back in 2017, a move that, irrespective of the public-policy merits it may have, at least has the potential to create stress for equities. Democrats have also promised tighter financial regulation and will look at how megacap tech companies operate.

Another possibility is that a Biden win is not accompanied by Democrats taking over control of the Senate, leaving Congress divided. That could temper expectations for a spending bill and threaten to stall much of Biden’s platform.

Read more: Market wisdom on presidents is often wrong

The S&P 500 retreated in both September and October after a torrid summer rally. It closed Tuesday about 6% below its all-time high.

While trades reflecting a Democratic sweep held firm, betting markets aren’t convinced. One gauge slipped to just over 50% odds of the so-called Blue Wave — that Democrats oust Trump and take Congressional majorities. Traders hedged prospects of post-vote volatility, driving a measure of expected swings in China’s yuan to its highest level in more than nine years.

“The closer the race is, the bigger the risk is,” said Erika Karp, founder and CEO of Cornerstone Capital Group. “A close outcome is a risk to the market. The longer it drags out, the bigger the risks.”

–With assistance from Vildana Hajric.

Tags: Bloomberg
Previous Post

Royal Media offices closed for Election Day 2020

Next Post

IATA tracks Sept. cargo improvements

Related Posts

ULS acquires first A330 ahead of conversion
Freighter Conversions

ULS acquires first A330 ahead of conversion

February 23, 2021
737 Classic conversion demand continues with Transair order
Freighter Conversions

737 Classic conversion demand continues with Transair order

February 22, 2021
Kalitta Air forays into 777F operations with ex-Emirates freighter
Engines

Listen: 777 freighter unaffected as Pratt-powered airframes face grounding

February 22, 2021
Next Post
Fraport sells its stake in Hannover Airport

IATA tracks Sept. cargo improvements

By subscribing you agree to our Terms of Use and Privacy Policy

Get Latest Issue

CARGO FACTS CONSULTING

CFC: U.S. air trade down 6% in 2020

CFC: U.S. air trade down 6% in 2020

February 19, 2021
Return to the skies of passengers doesn’t spell the end of passenger freighters

Pax freighters deliver capacity ‘lifeline’ to secondary markets

January 29, 2021
  • About Us
  • Help Center
  • Privacy Terms
  • ADA Compliance
  • Advertise

Follow Us

twitter twitter linkedin podcast

© 2021 Royal Media & Cargo Facts

No Result
View All Result
  • News
    • All News
    • Aircraft Leasing
    • Capacity & Demand
    • Carriers
    • E-Commerce
    • Engines
    • Express
    • Freighter Aircraft
    • Freighter Conversions
  • Data
  • Multimedia
  • Magazine
    • Issues Archive
    • Weekly Update
  • Events
  • Consulting
  • Subscribe
  • Log In / Account

© 2021 Royal Media & Cargo Facts

Go to mobile version