US stocks rose Tuesday as investors await results from two election campaigns in Georgia that will determine control of the Senate.
The S&P 500 rose 0.5% and the Dow Jones Industrial Average rose 0.5%. The Nasdaq Composite was up 0.6%. The The main benchmarks fell sharply on Mondayafter closing at record levels just a few days earlier.
Money managers monitor closely the runoff elections to the Georgia Senate Tuesday. If Democrats win both seats, it could make it easier for President-elect Joe Biden’s administration to pass new laws.
Additional fiscal stimulus would be more likely if Democrats took control of Congress and the White House, and this could potentially give stocks another step up, investors said. The prospect of tax hikes and more regulation is also putting a strain on the markets, they warned.
“The market loves the status quo and the deadlock, and this is exactly where we are right now,” said Patrick Spencer, managing director of US investment firm Baird. “There is fear of regulation for big tech and there is fear of more taxes, but with a narrow majority you won’t get much of it.”
Mr. Spencer is not alone in this view. A narrow victory for Democrats or Republicans who retain control of the Senate would likely mean the legislative agenda would be softened, others also said.
“When the government is bogged down, Goldilocks is because the government’s hands are tied,” said Gregory Perdon, co-chief investment officer at the private bank
In the short term, investors remain focused on the coronavirus pandemic, with increased infection rates and the likelihood of restrictions on social and business activities potentially affecting the global economic recovery. A highly contagious strain of Covid-19 Recently discovered in the UK it was also found in New York, the state governor said on Monday.
“There is generally a pretty consistent view of the outlook, which is, OK, we had the third wave, the fourth wave, but thanks to the vaccine we know it will be temporary,” said Daniel Morris, major market strategist at BNP Paribas Asset Management. “We have seen success with the new virus strain.”
While this is likely to weigh on sentiment, central bank liquidity, increased budget spending and the introduction of the vaccine counterbalance growth concerns, Perdon said.
“The market will remain bullish no matter which side wins,” said Perdon in Georgia. “The underlying theme is really the fear of missing out.”
In the bond markets, the yield on the 10-year Treasury note rose from 0.915% on Monday to 0.940%. Returns rise when prices fall.
The Institute for Procurement Management expects new figures on the strength of production activity in December at 10 a.m. CET. Economists polled by the Wall Street Journal predict that factories will continue to increase production in December, albeit more slowly than in November.
The Stoxx Europe 600 lost 0.4% overseas.
Hong Kong’s Hang Seng rose 0.6%. The Hong Kong-listed shares of the three largest Chinese telecommunications companies then rose sharply The New York Stock Exchange overturned its delisting decision She. The previous plan followed a U.S. government order, signed by President Trump in November, prohibiting Americans from investing in a list of companies that the U.S. government said supply and support China’s military, intelligence, and security services.
The company, which is one of China’s most valuable publicly traded companies, gained 5.1%
jumped 3.4% and 8.5% respectively. China’s Shanghai Composite gained 0.7%.
The Japanese Nikkei 225 was down 0.4%.
– Amber Burton contributed to this article.
Write to Caitlin Ostroff at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8