All three indices entered their fourth consecutive positive session on Thursday and were on track for their best week since April 9. The S&P 500 and Dow Jones are up 7% so far this week. The highly technological Nasdaq Composite led the way with a gain of nearly 9%. The strong rally follows a crisis the week before.
The stock surge came despite continued uncertainty about the outcome of Tuesday’s election. Democratic candidate Joe Biden leads with 253 electoral votes, according to projections by NBC News, while President Donald Trump has 214. Votes are still counted in several key states, including Nevada, Arizona, Pennsylvania and Georgia.
Republicans’ victories in several key Senate races, lowering the odds of a “blue wave” and potentially higher taxes and stricter regulations, have been cited by Wall Street strategists as a reason for the rally in values. technological. However, Republicans have yet to win the seats needed to control the Senate, according to projections by NBC News, with two potential polls in Georgia.
Alicia Levine, chief strategist at BNY Mellon Investment Management, said the possibility for Democrats to gain tight control of the Senate was one of the main risks unaccounted for in the market, although the breakups wouldn’t necessarily do fall the markets.
“The market is now pricing a Biden presidency with a Republican Senate, and the rotation we saw was based on that,” Levine said. “And if there is a growing risk that this will not be the case for the Senate, then this whole movement could be somewhat in jeopardy as well. ”
Levine also said the strength of tech stocks was in part due to their strong earnings performance and resilience in the event of further economic restrictions in the United States during the winter to slow the spread of the coronavirus.
Republicans have filed a wave of legal challenges in several states over the ongoing vote count, and the Trump campaign has said it will call for a recount in Wisconsin.
In a White House announcement Thursday night, Trump falsely claimed victory in several states and brought unproven electoral fraud charges, saying “there is a huge amount of litigation because of the unfairness of this process.” .
The Biden campaign, meanwhile, called for all votes to be counted.
“Democracy is sometimes messy. It also requires a little patience sometimes, ”the former vice president said in a short speech in Delaware on Thursday, adding that he was convinced his ticket would be declared the winner once all the votes were counted.
On the economic front, Friday will bring a fresh take on the job market for investors, with Labor Ministry jobs in October due to be published before the bell. The report comes on the heels of disappointing readings for ADP’s private payrolls and initial jobless claims.