Stock markets firmer on hopes for post-election US stimulus
Stock markets were mostly firmer Thursday, with investors increasingly confident Joe Biden and the Democratic Party will win the US presidency and both houses of Congress, paving the way for a huge new coronavirus stimulus package, analysts said.
President Donald Trump’s decision to break off talks for a second rescue package gave global traders a massive jolt on Tuesday but his call soon after for targeted help — including $1,200 handouts for Americans and help for small businesses — lifted hopes.
In his latest comments Thursday, Trump said there was a “really good chance” of getting a deal with the Democrats.
“The market realises that whoever wins (the election), more than likely Biden now, there is going to be significant stimulus and additional infrastructure spending,” said Andy Brenner, head of international fixed income at National Alliance.
The odds on a Biden win are shortening, with opinion polls putting him well ahead nationally and enjoying leads in battleground states such as Florida, where polling website FiveThirtyEight says Trump is losing the crucial senior vote.
A Biden victory and Democrats taking the Senate and House is also being priced into markets, as traders grow increasingly optimistic for a bigger rescue plan than what was being discussed before talks were curtailed Tuesday.
Democrats had initially proposed a stimulus of more than $3 trillion before lowering it.
All three major Wall Street indexes ended with gains of close to two percent Wednesday, with Asia and Europe picking up the baton Thursday.
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