Wall Street jumps on election news

Equity markets boosted by impressive New York session

Wall Street was swept with stimulus-mania overnight, as the Democrats completed a governmental clean sweep, and President Trump promised an orderly transition of power, sending indexes to new all-time highs. The S&P 500 rallied 1.48%, with the Nasdaq leaping 2.48% and the Dow Jones climbing 0.69%. Futures on the main US indexes continue the charge in Asia, moving higher by between 0.35 % and 0.40% today.

New York’s sentiment has swept Asia with some notable exceptions. The Nikkei 225 has jumped 1.65% to multi-decade highs. The Kospi is a massive 2.75% higher, with Hyundai up 24% today after it announced talks with Apple over building an electric car. Taiwan is 1.0% higher, with Singapore rallying by 1.75%.

Mainland China is a notable exception as stock markets have fallen today. The delisting of three China telco giants from US exchanges and some important tracker indexes from the likes of MSCI and others is weighing on mainland stocks. A government order to censor information on the government’s antitrust probe of Alibaba has also eroded sentiment, as is the US’s ongoing action to block several China payment apps. The Shanghai Composite is lower by 0.40%, while the CSI 300 has fallen 0.50%. Hong Kong appears to have shrugged off those woes though, rising 1.25%.

Kuala Lumpur has also fallen today; the KLCI is down 0.35%. Political concerns have reared their ugly heads again, but the leading cause for concern amongst local investors is Malaysia’s spiralling Covid-19 situation and the threats of more lockdowns. Covid-19 weighs on Australian markets as well, with Brisbane entering a three-day lockdown after a community case involving the highly infectious UK variant. The ASX 200 is up just 0.50%, and the All Ordinaries only 0.40%, despite a lower currency and yearly highs in key commodity prices.

European stock markets should take their cue from a very bullish Asia today and move higher. It is clear that the Democrat clean sweep is the primary driver of the equity rally at the moment. Only localised national event risk is causing divergence from the broader rally.

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