No Clear Winner Yet Except For The Nasdaq
Fiona Cincotta November 4, 2020 5:54 AM
Still no winner but the Nasdaq futures are surging
Biden has claimed victory, Trump has claimed victory but counting continues in the key swing states. The reality is the US election remains up in the air.
At the time of writing Joe Biden has 238 vs Trump’s 213 but the final result hangs on the key swing states and counting there continues. This could still take several hours until there is a winner.
The key development so far is that Biden has managed to take Arizona flipping the first state to Democrat, unlike when Trump took it from Hilary in 2016.
Congress is also going down to the wire with the Democrats not flipping as many seats as the polls had indicated in the Senate. This is key, because even if Joe Biden wins but fails to flip the Senate then political gridlock on Capitol Hill will likely continue. For the markets this means saying goodbye to that the massive fiscal stimulus package that a blue wave would have brought. Investors reining in stimulus expectations has put a slightly negative bias on market sentiment.
US S&P 500 futures are trading marginally lower whilst the US Dollar index is 0.1% higher as as caution remains and investors prepare to watch what happens over the coming hours.
The clear outperformer has been the Nasdaq. The tech heavy index futures are trade +2%. A split Congress would mean making sweeping legislation and tightening regulation, which could harm these big tech companies, would be difficult. Furthermore, the tech stocks such as Apple and Amazon have acquired an almost safe haven like status given their resilient earnings even through the pandemic. As the political uncertainty continues investors are leaning towards these tech stocks lifting the Nasdaq.
The Nasdaq trades +2.5%, jumping above the descending trendline which has been in place since early October. The surge higher has also taken the stock over its 200 SMA on the 4 hour chart. These are bullish signs. Immediate resistance remains at the daily high of 11779. On the flipside support can be seen at 11450 200 SMA, prior to 11330 trendline support.
Source: TradingView, GAIN Capital
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.