Tech Powers Stock Rally With Stimulus in Focus: Markets Wrap
(Bloomberg) — Stocks rallied a day after violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency.
Democrats, who already have a majority in the House, are set to take control of the Senate and presidency, paving the way for Biden to bring his legislative agenda to life and reshape the economy. He was recognized by Congress as the next president after a day of violence at the U.S. Capitol when pro-Donald Trump demonstrators breached police lines and entered the building. While campaigning in Georgia before the runoff elections, Biden vowed that $2,000 stimulus checks would be sent out “immediately” if his party won the state.
“Markets (rightly, in our view) see the U.S. government as ultimately a stable-enough set of institutions even if things occasionally go pear-shaped,” Nick Colas, co-founder of DataTrek Research, wrote in a note to clients. “Politics play second fiddle to economic and corporate fundamentals when it comes to setting asset prices. The country’s economic future coming out of the pandemic remains promising.”
Data Thursday showed that growth at U.S. service providers unexpectedly accelerated as gains in business activity and new orders helped offset a decline in a measure of employment. Friday’s jobs report is forecast to show a sharp slowdown in hiring.
Meanwhile, Senate Democratic leader Chuck Schumer called for President Trump to be immediately removed from office, saying he incited insurrection against the government by encouraging the mob that stormed the Capitol on Wednesday. Schumer, who is set to become majority leader, said Vice President Mike Pence should invoke the Constitution’s 25th Amendment, using support of the cabinet to take over in the Oval Office until Biden is inaugurated on Jan. 20.
These are some of the main moves in markets:
- The S&P 500 increased 1.4% as of 1:18 p.m. New York time.
- The Stoxx Europe 600 Index gained 0.5%.
- The MSCI Asia Pacific Index rose 0.7%.
- The Bloomberg Dollar Spot Index jumped 0.6%.
- The euro declined 0.5% to $1.2265.
- The Japanese yen depreciated 0.8% to 103.88 per dollar.
- The yield on 10-year Treasuries increased four basis points to 1.08%.
- Germany’s 10-year yield declined less than one basis point to -0.52%.
- Britain’s 10-year yield rose four basis points to 0.284%.
- West Texas Intermediate crude gained 0.3% to $50.80 a barrel.
- Gold lost 0.4% to $1,911.55 an ounce.