Stock Futures Surge Sunday Night After Biden is Presumed Winner
On Sunday, stock futures opened higher as traders priced in Joe Biden's victory in the presidential election, according to YahooFinance.
The world waited days for the results of the election. On Saturday, the Associated Press announced that Biden had won the election. In his victory speech, Biden stated that he wanted to end “this grim era of demonization in America.” He added, “if we can decide not to cooperate, then we can decide to cooperate.”
As of 9:30 PM EST on Sunday night:
- S&P 500 futures were up 1.36 percent
- Dow futures were up 1.19 percent
- Nasdaq futures were up 1.94 percent
There was skepticism amongst traders at first regarding a Biden presidency. He has proposed an increase in corporate taxes which would hinder growth potential. However, a Republican-controlled Senate would help mitigate some of the risks of Biden's more liberal ideas. Two Senate races are still ongoing in Georgia and will not be decided until January, but Republicans are not expected to lose both.
“A divided government would constrain the Biden administration’s ability to implement plans for large-scale fiscal stimulus and public investment, tax, healthcare and climate related legislation,” analysts from BlackRock Investment Institute said on Saturday. “We see an increased focus on sustainability under a divided government, but through regulatory actions, rather than via tax policy or spending on green infrastructure. It also would likely signify a return to more predictable trade and foreign policy – even as U.S.-China rivalry is set to stay elevated due to bipartisan support for a more competitive stance.”
“We’re monitoring the fiscal response closely, as a premature retrenchment could set back an economic restart that has so far surprised to the upside,” they said. Some analysts are hopeful that a stimulus package can get passed prior to inauguration day. “We are becoming increasingly hopeful that pressure from business leaders and vulnerable Republican Senators in 2022 will mean that something can pass before the end of the year, and very preferably before the end of the month,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in a note Sunday.
“Investors should expect a ratcheting down of US/China tensions and the ‘decoupling path’ of the Cold Tech war, which is a bullish sign for Apple (AAPL) and semi [semiconductor] stocks looking ahead,” said WedBush analyst Dan Ives.