US stock futures faltered on Tuesday as investors awaited the results of two election races in Georgia that would determine control of the Senate.
Futures tied for futures S&P 500, Dow Jones Industrial Average and Nasdaq-100, pointing to choppy trading after the New York Opening Bell. The major benchmark tumbled sharply after closing at record levels a few days earlier on Monday.
Money managers are closely monitoring the runoff elections in the Georgia Senate on Tuesday. If Democrats win both seats, it could make it easier for President-elect Joe Biden’s administration to pass new legislation.
The additional fiscal stimulus will likely be higher if Democrats control Congress and the White House, and which could potentially give the stock another leg up, investors have said. But tax potential increases and more regulation is also weighed on the markets, he warned.
Patrick Spencer, managing director of US investment firm Baird, said, “The status quo in the market, the gridlock, and that’s almost where we are right now.” “There is a fear of regulations on big technology and fear of more taxes, but with a slim majority, you are not going to get too much.”
Mr. Spencer is not alone in that scene. A narrow victory for Democrats, or Republicans retaining control of the Senate, meant that the legislative agenda would be restrained, others also said.
“If the government is in gridlock, then there is Goldilocks, because the government’s hands will be tied,” said Gregory Purden, Arbuthnot Letham, co-chief investment officer at the private bank.
In the near term, investors also remain focused on the coronovirus epidemic, with elevated infection levels and the possibility of a ban on social and business activity potentially bringing back the global economic recovery. A highly infectious strain of Kovid-19 recently discovered in the UK has also been found in New York, the state governor said on Monday.
“On a daily basis, we are going for this tug and pull between hospitalization rates and mobility,” Mr. Purden said.
He said that because of this the Sentiment is likely to be weighed, providing an imbalance to concerns about central banks’ liquidity, increased fiscal spending and increased vaccine rollout. He said that the US stocks are likely to continue to rise.
“The market will be booming, regardless of which side wins” in Georgia, Mr. Purden said. “The underlying theme is actually the fear of disappearing.”
In bond markets, the yield on the 10-year Treasury note rose from 0.915% to 0.915% on Monday. Yields increase when prices fall.
The latest data on the strength of manufacturing activity in December is due to the Institute for Supply Management at 10 am ET. Economists expected by The Wall Street Journal expected factories to continue to expand production in December, albeit at a slower pace than in November.
Overseas, Stokes Europe 600 ticked down 0.3%.
Hong Kong’s Hang Seng climbed 0.6%. Overturned its decision to distribute the Hong Kong-listed shares of China’s three largest telecom companies by the New York Stock Exchange. The previous plan followed a US government order, signed by President Trump in November, that barred Americans from investing in a list of companies that the US government supplies and supports China’s military, intelligence and security services.
China Mobile shares,
Which is the most valuable among China’s listed state-owned enterprises, rose 5.1%, while China Telecom and China Unicom jumped 3.4% and 8.5% respectively. China’s Shanghai Composite added 0.7%.
Japan’s Nikkei 225 went down 0.4% by the end of trading.
Write Caitlin Ostroff at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8