NEW YORK, Jan 6 — Futures tracking the Nasdaq 100 index fell more than 1 per cent today as investors priced in the prospect of Democrats winning both races in a Senate run-off election in Georgia that will determine the balance of power in Washington.
Edison Research called one of the races for Democrat Raphael Warnock, unseating incumbent Kelly Loeffler, while Democratic challenger Jon Ossoff held a slim lead over Republican David Perdue in the other with 98 per cent of votes counted.
A Democrat-controlled Senate would give more scope for President-elect Joe Biden to act on his reform plans including new Covid-19 stimulus, but it could also mean higher corporate taxes and tighter regulations on the technology mega-caps — policies not typically favoured by Wall Street.
“A ‘blue wave’ might not be a bad outcome for markets as decisive fiscal action will help to accelerate economic recovery,” said Vasu Menon, investment strategy executive director OCBC Bank, Singapore.
“This will be broadly bullish for risk assets, particularly equities, credit, commodities, and emerging market securities.”
By 2.06am ET, Dow e-minis were up 89 points, or 0.29 per cent. Constituents of the blue-chip Dow are generally expected to benefit from a pickup in economic activity.
S&P 500 e-minis were down 5.25 points, or 0.14 per cent, and Nasdaq 100 e-minis were down 147 points, or 1.15 per cent.
Hopes of a vaccine-powered economic recovery in 2021 had powered Wall Street’s main indexes to record highs in late-December, but sentiment has recently been dented by the discovery of a more contagious variant of the coronavirus and the latest restrictions.
Analysts also expect the market to consolidate December’s gains in January as asset managers look to rebalance their portfolios that had been heavily tilted toward equities. — Reuters
Source: Malay Mail
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