WILL TRUMP ACCEPT DEFEAT?
U.S. and European equity futures and most Asian stocks climbed Tuesday after the triggering of a formal transition process to President-elect Joe Biden. The dollar dipped.
S&P 500 and European contracts advanced after the General Services Administration acknowledged Biden as the apparent winner of the presidential election. Stocks outperformed in Japan, which reopened after a holiday, and Australia. They fluctuated in Hong Kong and China after a report that senior Trump administration officials are pushing for new measures against Beijing.
Earlier, U.S. equities closed in the green, with tech shares lagging and small caps jumping. AstraZeneca Plc became the latest firm to deliver positive vaccine news, spurring demand for cruise-line operators and airlines. Sentiment also was boosted after people familiar with the matter said Biden plans to nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Gold added to overnight losses and oil gained.
FX Overnight News:
- Emily Murphy, the General Services Administration head, on Monday effectively acknowledged Joe Biden as the winner of the presidential election, three weeks after the event, saying he could have briefings and funding to ease his transition into the role.
- President Donald Trump tweeted his approval of the move, suggesting he has come to terms with the result, even though he vowed to continue fighting. That followed the decision by the state of Michigan to certify its election results, ending Trump's last big hope of overturning his defeat at the polls.
- Uncertainty over whether there would be an orderly transfer of power in the largest economy in the world had weighed on the markets to a certain extent since the Nov. 3 election.
- However, the dominant driver of late has been the progress in the search for a vaccine for the Covid-19 vaccine. On Monday, AstraZeneca announced its candidate had an efficacy of up to 90% in certain doses, the third potential vaccine after similarly positive news from Pfizer (NYSE:PFE) and Moderna.
- In Europe, some governments have already started scaling back their recent lockdowns, although Monday’s PMI data pointed to significant economic damage having already been done.
- Germany’s third-quarter GDP release rose 8.5% on the quarter, a recovery from the historic 9.7% fall in the previous quarter, but of more interest may be the influential Ifo business climate index for November, due later in the session. This is expected to show a slowdown to 90.1 from 92.7 given the restrictions during the month to combat the second wave of the coronavirus.
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November 24, 2020