On the market list, hatred, uncertainty, political conflict, and elicited confusion all have to rank fairly high among the top negative risk factors. Nevertheless, and ahead of what could become a closer contest than many expected global stocks at an unreasonable rate on the eve of the US presidential election.
Continuing yesterday’s perplexed bullishness, all eurozone stocks have skyrocketed once again, spurring by the Australian Reserve Bank’s stimulus group. Rejoicing in ignoring the Covid lockdown and US election warning lights, Dax and CAC were added to yesterday’s 2% rally, with jumps of 2.55% and 2.44% on Tuesday reaching up to 12,088 and 4,805 respectively.
In a similar mood, the FTSE 100 is the FTSE 100, with financial stocks such as Natwest, Prudential, Hargreaves Lansdown and RSA Insurance all over 5% or 5% on Tuesday. The UK’s top hitter index bouncing 2.33% to 5,786 as emotional factors far outweigh the infection and political reality checks.
Plus, and surprisingly, given the fact that they’ve now voted for men who decide public policy for four years, US stocks were mildly photographed when deals came in and out on Tuesday. The Dow Jones, who was led to a recovery from last week’s Fan Mag Big Tech Dip, rose 2.06% to 27,480 points. This fact was reflected by the Tech Heavy Nasdaq, up 1.85% for Apple, Amazon, Alphabet, Microsoft, and Facebook (and don’t forget Tesla – up 5.90%).
What makes these types of gatherings so weird is that they suggest that others have something they don’t have in the market. Speaking about what he described as a “green tsunami” beyond global stocks, Connor Campbell of Spreadex Financial Analyst commented.
“That (index) fell fast and fast last week, undoubtedly a contributor to the size of profits on Tuesday.”
“The danger for the market is a very real danger — it’s about to wake up in a hangover hell on Wednesday if the outcome is anything other than a crucial and exciting signature victory for Democrats.”
“And there are obstacles that get in the way of the results, and we can spend a long and lingering tally period thanks to the enormous number of email-in voting.
The Democratic clean sweep potential narrows with every minute, and many Bookies say that the majority of punters are now using generous odds for Trump’s victory, but SpreadX himself has increased Trump’s expected college votes from 222-230 to 227-235.
With this in mind, Global Equity will be dealing a hammer blow to the gut when the underdog incumbent enters its second term. IG Chief Market Analyst Chris Beauchamp commented, reflecting this sentiment:
“The risk is that investors are ahead of themselves, given the possibility of a long-standing battle over the outcome of US elections in the coming weeks, given that there will not be any obvious outcomes by tomorrow morning.”
“In that case, risk assets could struggle to advance a lot, even if they could avoid even greater losses, just like what we saw last week.”
“The focus on elections obscures a truly important element: US fiscal stimulus, as those who appear as winners need to sort out this most pressing item before the US economy moves into even deeper slump.”
