Biden increases risk risk assets, dollar nurses losses

SYDNEY (Reuters) – Shares rose, oil prices rose and the dollar weakened on expectations of lower regulatory changes and higher monetary incentives under US President-elect Joe Biden.

Masked men following the outbreak of corona virus disease (COVID-19) were found on November 9, 2020, in the Lujiazui financial district in Shanghai, China, near the electronic board showing the Dow Jones and S&P 500 stock indices. REUTERS / Aly Song

The victory of the Democratic candidate in the US presidential election was largely determined by the markets, which have been trading since last week in the eyes of the US Senate, which is controlled by the President and the Republican Party.

E-Mini futures for the S&P 500 SC1 On Monday the Nasdaq rose more than 1.5% in the future NQc1 Accumulation of more than 2% indicates a favorable start for the US markets.

MSCI is the broadest index of Asia Pacific stocks outside Japan .MIAPJ0000PUS 1.3% to 613.95 points, the highest since January 2018. It rose 6.2% last week to surpass its best weekly performance since the beginning of June.

“Although there has been a lot of focus on Trump vs Biden, markets have responded strongly to the (potential) split conference, which means there is high confidence that interest rates will remain low for a long time,” said Dave Wang, portfolio manager at Nueve Capital, Singapore.

“The best opportunities are now within emerging market segments, especially China and North Asia. I believe revenue growth and valuation put China at a very attractive risk / reward level.”

Chinese stocks started higher with the blue-chip CSI 300 index .CSI 300 Up to 1% in confidence in better Sino-US trade relations under Piton.

Japan .N225 Australia’s key indices rose 2% .Oxjo, Hong Kong .HSI And South Korea .KS11 Each received 1.7%.

Shares rallied sharply last week with the S&P 500 .SPX According to National Bank of Australia analyst Tapas Strickland, it has risen 7.3% in election week since 1932.

However, Australian financial manager Perpetual’s Matt Sherwood said Biden’s success did not necessarily change his portfolio.

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“Ultimately, we think the U.S. economy is still weak and growth is slowing,” Sherwood said.

“You can draw your portfolio more towards high-beta type markets like emerging markets, and there are better opportunities in the energy space than the Democratic clean-up event.”

Oil prices rose on Monday as investors cheered on Biden’s success, allaying concerns over sluggish demand amid global corona virus cases. [O/R]

Brent crude LCOc1 From $ 1. Added up to 40.48.

Analysts have warned that the road from here could be tough as investors focus on Biden’s ability to expand its financial incentives and measures to reduce the spread of COVID-19.

New corona virus infections were reported in the United States last week, bringing the total number of cases to more than 10 million.

Jim Wilding, a wealthy manager in the United States, has a word of caution with union finance partners in Pennsylvania. .SPX From all time highs and stock ratings are generally not at the best levels.

“We are positive on the interim outlook and hope that the split government reduces the chances of a bear case situation and that we move away from unrestrained enthusiasm at current levels,” he noted.

A fiscal stimulus plan is still possible despite the split government, analysts say, even if a larger package is less. It focuses more on the US Federal Reserve to boost the world’s largest economy.

As a result, the dollar has weakened USD = Development representatives like the Australian dollar in recent days AUD = Biden’s presidency is less prone to trade conflicts.

The dollar was mostly flat against the Japanese yen JPY = It was 103.31 after slipping about 1.3% last week.

Aussie is up 0.2% from 3.3% last week.

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Investors’ attention will be focused on sterling and the euro this week as the UK-EU trade talks turn upside down with the EU summit on November 15.

Later in the day, the Chief Economist of the Bank of England will give a talk on ‘The Economic Impact of the Corona Virus and the Long-Term Impacts on the UK’.

Euro EUR =It touched 1.9% last week, up from a shadow 18 1.1887 on Monday. Sterling GBP = 31 rose to 1.3183.

(For a graphic on Asian stock markets: Performance, clickHere

Swati Pandey report in Sydney; Tom Westbrook and Michael Price Additional Report; Editing by Daniel Wallis and Sam Holmes

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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