· Dow Jones Futures Fall, While Tech Futures Sell Off Amid Georgia Senate Vote Results
Dow Jones futures and S&P 500 futures were lower, while Nasdaq 100 futures sold off early Wednesday, as Georgia citizens voted to decide a pivotal runoff election. Apple stock rebounded after triggering a sell signal from a buy point, while Tesla aimed for more record highs after a price-target hike after the close Tuesday. JD.com surged to a breakout above a new buy point.
The stock market rally recovered a portion of Monday's sell-off losses, as it continues to trade just off record highs. The Dow Jones Industrial Average rallied 0.55%, or 167 points, while the S&P 500 climbed 0.7%. The tech-heavy Nasdaq composite moved up 0.95%.
· Nasdaq futures tumble as investors brace for possible Blue Wave
Futures tracking the Nasdaq 100 index fell more than 1% on Wednesday as investors priced in the prospect of Democrats winning both races in a Senate run-off election in Georgia that will determine the balance of power in Washington.
Edison Research called one of the races for Democrat Raphael Warnock, unseating incumbent Kelly Loeffler, while Democratic challenger Jon Ossoff held a slim lead over Republican David Perdue in the other with 98% of votes counted.
A Democrat-controlled Senate would give more scope for President-elect Joe Biden to act on his reform plans including new COVID-19 stimulus, but it could also mean higher corporate taxes and tighter regulations on the technology mega-caps - policies not typically favored by Wall Street.
“A ‘blue wave’ might not be a bad outcome for markets as decisive fiscal action will help to accelerate economic recovery,” said Vasu Menon, investment strategy executive director OCBC Bank, Singapore.
“This will be broadly bullish for risk assets, particularly equities, credit, commodities, and emerging market securities.”
· Deutsche Bank remains upbeat on Asian emerging markets in 2021
Tuan Huynh of Deutsche Bank International Private Bank says his firm has also increased its stock portfolio allocations in the past few months to reflect its constructive view on the global recovery from last year’s downturn.
· Markets weigh winners and losers should Democrats take Senate
Asian markets were leaning toward a Democratic win in crucial Senate contests on Wednesday as Treasury yields hit 1% for the first time in 10 months on expectations of more debt-funded spending on COVID-stimulus, infrastructure and renewable energy.
Analysts generally assume a Democrat-controlled Senate would be positive for economic growth globally and thus for most risk assets, but negative for bonds and the dollar as the U.S. budget and trade deficits swell even further.
· Japan stocks end lower amid U.S. Senate runoff uncertainty
Japanese stocks ended lower on Wednesday amid uncertainty about the results of U.S. Senate runoff elections in Georgia, while sentiment was also dented by a likely announcement of a state of emergency in Tokyo and surrounding cities later this week.
The Nikkei 225 Index ended down 0.38% to 27,055.94 after gaining as much as 0.17%. The broader Topix rose 0.28% to 1,796.18.
If Democrat challengers win, it would be easier for President-elect Joe Biden to pass big fiscal spending, which is generally considered a positive. A Democrat sweep could also make it easier for Biden to raise corporate taxes, a negative factor for stocks.
However, margins were razor thin and official results will not be known until the following day, leaving the outcome up in the air.
· China's blue-chip index ends at 13-year high led by gains in banking, healthcare stocks
China’s blue-chip index closed on Wednesday at its highest level in nearly 13 years after rising for five consecutive sessions, as investors expect the government to sustain policy supports to counter COVID-19’s persisting impact on the economy.
At the close, the blue-chip CSI300 index was up 0.92% to 5,417.68, its highest since January 16, 2008, while the Shanghai Composite index was up 0.63% at 3,550.88.
· European markets inch higher as coronavirus and Georgia runoff remain in focus
European stocks were modestly higher on Wednesday morning as the coronavirus pandemic and U.S. political developments remain a key focus for investors.
The pan-European Stoxx 600 climbed 0.3% in early trade, with banks adding 2.4% to lead gains while health care stocks bucked the upward trend to slide 0.9% lower.
Reference: CNBC, Reuters, investor.com
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