WORLDWIDE : HEADLINES
Analysts’ View: Markets hold breath as final votes tallied in battleground states
U.S. stock futures took a breather in after-hours trade on Wednesday, as ballots were tallied in several states that should decide whether Democratic challenger Joe Biden unseats President Donald Trump in an election that remains too close to call.
S&P emini futures were up 0.25% on the heels of a 2.3% rally in the S&P 500 on Wednesday, catalyzed by the prospect of gridlock in Congress after Democrats appeared to have failed to take control of the U.S. Senate. That raised optimism that disruptive policy changes would be hard to implement regardless of the winner in the presidential contest.
By early Asian trade the dollar index had ceded its gains and was up a tad at 93.53 after touching a one-month high of 94.308 during the U.S. day. U.S. 10-year Treasury note futures extended a huge gain after Treasury yields fell hard Wednesday.
Full coverage: REUTERS
U.S. withdrawal from Paris Agreement extremely regrettable, Japan says
TOKYO – The United States’ withdrawal from the Paris Agreement is extremely regrettable, Japan’s top government spokesman Katsunobu Kato said on Thursday.
“The climate change issue isn’t something of a single country, it should be addressed by the entire international community,” Chief Cabinet Secretary Kato told reporters.
“From that point of view, it’s extremely regrettable that the United States is withdrawing from the Paris Agreement now,” he said.
Full coverage: REUTERS
Investors welcome U.S. election gridlock, retreat from ‘blue wave’ bets
NEW YORK – Investors who met news of likely gridlock in Washington with a large-scale unwind of bets on a Democratic sweep weighed prospects for big stimulus measures while cheering fading expectations of higher taxes and new regulations.
Regardless of whether Democrat Joe Biden or Republican Donald Trump wins the presidency, some investors on Wednesday welcomed the prospect that either candidate would likely face some opposition in Congress that would be a barrier to sweeping legislative changes.
“The market likes the fact that we have a gridlock,” said Gary Bradshaw, senior vice president at Hodges Capital Management in Dallas. “We are not likely to see big tax increases, and not a lot of regulation.”
Despite predictions ahead of the election that not having an early clear result could derail stocks, equities soared as the prospect of gridlock provided some solace and calm.
Markets saw tempering of so-called “reflation” trades that had predicted a strong Democratic score in presidential and U.S. Senate races would lead to a bigger stimulus and higher inflation, as well as some safe-haven buying on caution the election is so close.
“There is no blue wave,” said Robert Sears, chief investment officer at Capital Generation Partners. “The chance of a lot of fiscal spending … that scenario is out of the window now because it looks like Republicans are going to keep the Senate.”
Full coverage: REUTERS
WORLDWIDE : FINANCE / MARKETS
Asia shares near three-year high, bonds hold gains on U.S. gridlock bets
SYDNEY – Asian shares climbed on Thursday and bonds extended their blistering rally as investors wagered the likely prospect of U.S. policy gridlock would greatly favour some industries while putting a restraining hand on government borrowing.
The risk of a prolonged contested election remained, though the count was progressing in an orderly fashion with Democratic challenger Joe Biden narrowly ahead in key states.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.3% to reach its highest since February, 2018. Japan’s Nikkei rose 1.1% to a nine-month top and South Korea put on 1.5%.
Chinese blue chips gained 0.8%, aided by talk a Biden White House might ease back on trade war tariffs.
E-Mini futures for the S&P 500 edged up 0.1%, after sharp gains overnight, while EUROSTOXX 50 futures eased 0.3%.
Both President Donald Trump and Biden have paths to 270 Electoral College votes as states tallied mail-in ballots. Biden remained optimistic on winning while the Republican incumbent filed lawsuits and demanded recounts.
Full coverage: REUTERS
Dollar dips in nervous trade as Biden inches closer to White House
TOKYO – The dollar slipped to its weakest level in more than two years against the yuan and ground lower against other Asian currencies as Democrat Joe Biden edged ever so closer to the White House in a nail-biting U.S. presidential election.
Financial markets, however, were braced for days or even weeks of uncertainty as Republican incumbent President Donald Trump has opened a multi-pronged attack on vote counts in several states by pursuing lawsuits and a recount.
That could hamper the dollar in the short run, traders say.
Elsewhere, sterling fell against the dollar and the euro after a media report that the Bank of England, which announces a policy decision later on Thursday, is considering negative interest rates.
The Federal Reserve, which is expected to keep policy on hold on Thursday, is also in focus as traders navigate market volatility in the wake of a knife-edge U.S. election that has pushed up the yuan and the Mexican peso.
Biden has claimed the pivotal Midwestern states of Wisconsin and Michigan. Late reporting showed the former vice president with a lead in Nevada and Arizona, while Trump held a lead in Georgia.
Full coverage: REUTERS
S&P 500 futures rise as U.S. election suggests less regulatory risk
U.S. stock market futures were marginally higher late on Wednesday as the presidential election race remained cloudy and the likelihood of gridlock in Congress made investors optimistic that major policy changes would be difficult to enact.
S&P emini futures EScv1 were last up 0.1%, extending a rally in Wednesday’s stock market trading session. Nasdaq 100 emini futures NQcv1 rose 0.5%.
Democratic candidate Joe Biden predicted a U.S. election win over President Donald Trump after pivotal victories in Michigan and Wisconsin, while the Republican incumbent sought to offset a narrowing path to re-election with lawsuits and demands for a recount.
Both Trump and Biden still had paths to reach the 270 Electoral College votes needed to win as states kept counting mail-in ballots. However, Trump now has fewer options to secure a second four-year term.
Full coverage: REUTERS
