Tuesday, January 05, 2021
Kindly waiting for Georgia
Wall Street makes up for a poor start to the year
The runoff election in Georgia will have a decisive impact on the freedom of future President Joe Biden to rule. Both a Democratic and a Republican majority in the US Senate would be advantageous for investors. On Wall Street, the vote is therefore relaxed.
On the day of the eagerly awaited runoff election for the two Senate posts in the US state of Georgia, investors held back from investing in Wall Street, but almost made up for the weak start to a US stock market year since 2016. An unexpectedly better purchasing managers’ index in the manufacturing sector in December provided positive impetus. Stockbrokers are also likely to have heard that the US Federal Reserve Banker Loretta Mester expects the central bank to continue its $ 120 billion monthly asset purchase program throughout the year, even if the economy recovers in the second half of the year.
Concerns about the corona pandemic were simmering somewhat in the background, although lockdowns are being tightened in some parts of the world. The clear winners were oil stocks, which received a boost from soaring oil prices. The Dow Jones gained 0.6 percent to 30,392 points that S&P 500 put that a tad clearer NasdaqIndexes by 0.9 percent.
The Oil prices were last 5 percent higher. The US variety WTI cost more than 50 per barrel at times – for the first time since the end of February 2019, when the corona pandemic hit the financial markets. On the one hand, the prices were driven by the fact that the Opec + countries agreed on only a slight increase in the reduced production volumes in February and March.
In addition, the tensions surrounding Iran caused price-driving speculations about a lower oil supply from the oil-producing country. Iran claims that it has achieved the announced uranium enrichment of 20 percent despite international criticism. In addition, a US aircraft carrier is still in the Gulf region, according to the US administration because of new “threats” from Iran.
Look to Georgia
Many stockbrokers looked hopefully at the ongoing Senate runoff elections in the state of Georgia. “The election result will determine how much leeway the future President Joe Biden has in the implementation of his program,” said Matthias Scheiber, manager of wealth management at Bank Wells Fargo. Should Biden’s democrats gain the upper hand in the Senate as well as the House of Representatives, experts expect additional government spending programs.
The analysts at ING Bank noted that this is raising the mood on the market. Investors’ worries about stricter regulation and rising taxes would take a back seat for at least a few months.
Rabobank analysts predict that if the Republicans defend their majority, they would block additional spending. At the same time, however, they would force the central bank (Fed) to step into the breach to cushion the consequences of the coronavirus. Since they reject negative key interest rates, all that remains is to buy additional securities.
China is pleased to back down
The stocks listed in the USA by China Telekom, China Mobile and China Unicom increased by up to 13.5 percent. The New York stock exchange operator Nyse had abandoned its plan to exclude these shares from trading. Boeing recovered practically completely after the very weak start of the week by 4.4 percent, while Coke fell a little further by 1.1 percent.
The sub-index of oil stocks in the S&P 500 index gained over 4.5 percent. In the Dow, chevrons rose 2.7 percent. Exxon was up 4.8 percent, Occidental Petroleum was 10.1 percent and Marathon Oil was up 9.1 percent.
That the ambitious joint venture in the company health care of Amazon, Berkshire Hathaway and JPMorgan Chase is ended unsuccessfully, their courses moved only moderately. It should manage the health care of the more than 1.5 million employees of the three companies and reduce costs for the corporations. JPM lost 0.2 percent, Amazon was up 1 percent and Berkshire was down 0.4 percent.
Delta Air Lines gained 2.1 percent. Amazon is expanding its fleet of cargo machines and has acquired eleven machines from Delta Air Lines and Westjet Airlines.