SYDNEY (Reuters) – Dollar Street stock futures opened higher on Monday on expectations of lower regulatory changes and more monetary stimulus for risk assets under US President-elect Joe Biden.
Biden’s presidency and the Republican – controlled U.S. Senate traded heavily last week on the Democratic candidate’s victory in the U.S. presidential election.
E-Mini Futures for S&P 500 SC1 US markets opened 0.6 percent higher on Monday.
Japan wide-ranging index of MSCI Asia Pacific shares .MIAPJ0000PUS It rose 6.2 percent to 0.1 percent last week to see its best weekly performance since early June.
“The fact that the government seems to be divided at this point gives more persistence to the current environment than the possibility of broader changes,” said Jim Wilding, wealth manager at Confluence Finance Partners in Pennsylvania.
“We see this as a net positive for the equity markets, especially in this case where the return of higher taxes is very low in the coming years,” he added.
Wilding took a cautious approach with the S&P 500 .SPX Not too far from the all-time high.
“While we remain positive on the Intermediate Term perspective and believe that a divided government will reduce the likelihood of playing a bear case, we will avoid unbridled enthusiasm at current levels,” Wilding said.
Equities lined up with the S&P 500 last week .SPX According to National Bank of Australia analyst Tapas Strickland, the best gain in an election week since 1932 is 7.3 per cent.
Matt Sherwood, Australian fund manager Perpetual, said Biden’s success did not require tweaking his portfolio.
“Finally, we think the U.S. economy is still weak and growth is slowing,” Sherwood said.
“You can diversify your portfolio into higher beta-type markets, such as emerging markets, and have better potential in the energy space than the Democratic clean sweep.”
Analysts warn that the road from here could be even tougher as investors focus on Biden’s ability to develop financial stimulus and measures to reduce the spread of COVID – 19.
Last week there was a record new corona virus infection in the United States, with a total of close to 10 million cases.
Despite the divided government, a fiscal stimulus plan is still possible, although a large package is unlikely, analysts said. The U.S. Federal Reserve is increasingly focused on strengthening the world’s largest economy.
As a result, the dollar weakened USD = Growth proxies like the Australian dollar in the coming days AUD = Biden lined up with the presidency, which is less likely to clash with trade.
The dollar was a weak shadow against the Japanese yen JPY = After falling 1.3 percent last week at 103.25.
The Aussie was up 0.3 percent last week, up 3.3 percent.
Investors in sterling and the euro will be the focus of the UK-EU trade talks at the European Union summit on November 15.
In the following days, the Chief Economist of the Bank of England will give a talk on the ‘economic impact of the corona virus and the long-term effects on the UK’.
Euro EUR =It rose 1.9 percent last week to $ 1.1887 on Monday. Sterling GBP = At shade 1.3146 a shadow was weak.
That left the dollar index = USD Of 0.1%.
In commodities, oil prices fell below $ 40 a barrel on Friday. Concerns are declining as global corona virus cases increase. CLc1LCOc1
Spotlight rose 0.36 per cent to Rs 1,958.7. XAU =
Swati Pandey Reporting; Additional reporting by Tom Westbrook and Michelle Price; Editing by Daniel Wallis and Sam Holmes