Gains across the markets
Chris Beauchamp, Chief Market Analyst at IG, discusses the US election and the UK economy.
“The gains continue to be seen in European markets, with the FTSE 100 up 20 points in mid-morning trading.
“Stock markets continue to take the US election in a positive frame of mind, and with the BoE throwing more QE into the fray, the second central bank to do so in a week, the outlook for stocks continues to brighten.
“Last week’s selloff looks more and more like pre-election jitters, a bout of nervousness that has been reversed even more swiftly than it appears.
“It is true that the US election is yet to be officially decided, but Biden seems likely to cross the 270 vote threshold in coming days, potentially rendering Trump’s legal challenges irrelevant, and with this bump in the road removed, stock markets can rally once more.
“The BoE’s outlook for the UK economy is understandably grim, prompting the move towards more QE, but as in the US the real boost will come from fiscal stimulus, and at least here there is some good news thanks to the chancellor’s decision to extend furlough.
“The costs of the virus continue to mount at an astonishing speed, but given the alternative markets have decided they are the lesser of two evils, hence the continued strength in risk appetite.
“Even supermarkets, the big winners of lockdown no. 1, are not immune from the current tough climate, as Sainsbury’s revealed this morning.
“For the share price, it looks like 210p is far enough in this current climate, given the expected pressure on consumer spending in the weeks and months ahead.
“Tesco has managed to avoid a bigger loss this morning however, perhaps a beneficiary of its broader reach and its greater value proposition that might boost its sales in months to come.”
Biden nears victory
According to eToro analyst Adam Vittese, “Stock markets globally gained yesterday as Democratic nominee Joe Biden neared victory in the US presidential election.
“On a monumental day that saw Biden gather the most votes of any Presidential candidate in history, US stock futures then extended those gains yesterday evening as more states turned blue.
“The big winners were technology giants and the healthcare sector, which may well end up with their dream scenario of a Biden White House and a Republican-controlled Senate.
“Without both houses, Biden’s ability to pass tax increases and increase regulation will be restricted, while tech firms are eyeing a smoother relationship with China (which is crucial both to supply chains and as a market for tech products). If the Democrats fail to win a Senate majority, Biden will be restricted in his ability to reform healthcare and increase regulation there.”
S&P: 500 +1.95%
FTSE 100: 0.39%
Asia Dow: 0.12%
Nikkei 225: 1.73%
S&P ASX 200: 0.70%
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.