The actions of EE. UU They set profits after the results of mid-term dollar slips
The actions of EE. UU They set profits after the results of mid-term dollar slips
Wall Street is scheduled to open higher on Wednesday after the US semester choiceIt showed the Democrats winning control of the House of Representatives and the Republicans holding the majority in the Senate.
The result was what investors expected to a large extent, so while the potential for a political stalemate in Washington increases, the market reaction is not as volatile as after other political events, such as the 2016 presidential vote. historically, markets have performed well after the midterm elections and with a split in Congress.
Futures show that the S & P 500 and Dow Jones industrials open about a half percent more, while the Nasdaq is ready for a gain of close to 1 percent.
"It seems that the market accepted what they expected, and that's good," said Quincy Krosby, chief market strategist at Prudential Financial.
It is not clear how a government divided between a House controlled by the Democrats, a Republican Senate and Republican President Donald Trump could govern. But if the possibilities of compromise and the big issues on the agenda seem limited, Wall Street agrees with that because it means that the policy is much less likely to exclude the performance of the strong economy of the United States.
Republicans had discussed a new round of tax cuts if they maintained full control over Congress, a move that would have further widened government deficits and required it to issue more debt. Yields on government bonds increased overnight after a batch of solid initial results for some Republican candidates, but then declined as the Democrats' luck improved, making a new government package unlikely. tax cuts.
The yield on 10-year Treasuries was as high as 3.25 percent on Tuesday night from 3.21 earlier in the day. On Wednesday morning it dropped to 3.20 percent.
The US dollar also weakened in the morning. The US currency fell to 113.31 yen from 113.31 yen, and the euro rose to $ 1.1476 from $ 1.1413.
The main indexes in Europe went up. The French CAC 40 rose 1.2 percent, while the DAX in Germany rose 0.9 percent and Britain's FTSE 100 gained 1.1 percent.
"One thing is for sure: the cloud of uncertainty in recent weeks has been lifted," said Mike Read, founder of the social-commerce platform Pelican. "Traders with little investment will return to the markets."
US markets weakened in October (the S & P 500 index fell about 7 percent) as investors were concerned about rising interest rates and the trade dispute between the United States and China. Both the S & P 500 and the Dow are showing small gains in November.
October is historically a difficult month for stocks, and markets generally rise after the midterm elections, regardless of how the political landscape changes because Wall Street is happy to have more certainty.
High-growth stocks were hit during the market downturn last month, and Krosby said it would be worthwhile to see if investors are willing to buy those stocks again or if they continue to prefer more "defensive" companies with slower growth, such as public services and manufacturers of household items.
In pre-market operations, high-growth stocks such as Apple, Amazon and Facebook showed gains of around 1 to 1.5 percent.
The choice had implications for several sectors of the market. Marijuana growers were on the right track Wednesday morning, after Michigan voters approved a ballot measure to legalize marijuana, while Missouri became the 31st state to approve marijuana. Utah was also considering that step. A measure of legalization of marijuana in North Dakota was defeated. Tilray rose 6 percent in the first operations.
The actions of Medicaid program administrators could go up after Idaho and Nebraska voted to expand Medicaid programs.
A pair of oil drillers, Anadarko Petroleum and Noble Energy, showed strong gains in pre-market operations after Colorado voters rejected a measure that could have drastically reduced oil and gas drilling, including the method known as fracking, by requiring that new oil and gas wells be built farther from occupied buildings than is allowed by current law.
It is not clear how the outcome of the election will affect Trump's policy that Wall Street could be more concerned: its search for a "first in the United States" commercial strategy that has led to the US. UU And China, the two largest economies in the world, to a trade war.
"A divided Congress, in all likelihood, will not prevent Trump from doubling rates with China," said Neil Wilson, chief market analyst at Markets.com.
In Asia, Japan's Nikkei 225 benchmark fell 0.3 percent, while South Korea's Kospi fell 0.5 percent. But the Hang Seng of Hong Kong exceeded 0.1 percent.
One of the main concerns in Asia is the potential of trade tensions to slow down the growth of economies dependent on exports. Trump imposed tariffs of up to 25 percent of Chinese imports of up to 25 percent, and Beijing responded with tariffs on the 110 billion dollars of US products.
Konstantinos Anthis, head of research at financial services firm ADSS, said Trump "will definitely have more trouble achieving his legislative initiatives in Congress," but that "this should not be a buffer for the dollar in the long term." "
Potentially more important for the dollar this week, he said, will be the last announcement of the Federal Reserve interest rate on Thursday and its accompanying statement. While rates are expected to remain on hold, policymakers are scheduled to signal a new increase next month.
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Pan Pylas in Europe and Yuri Kageyama in Tokyo contributed to this report.
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