Futures rise as investors bet on Biden victory, more stimulus

In this news, we discuss the Futures rise as investors bet on Biden victory, more stimulus.

(Reuters) – U.S. stock index futures rose on Tuesday as investors bet on a Joe Biden victory followed by a swift deal on more fiscal stimulus in one of the most controversial presidential races in the history of the United States.

After falling to five-week lows last week, the S&P 500 and Nasdaq started November on solid footing, as Democratic presidential candidate Biden’s consistent lead in national opinion polls has raised hopes for a larger stimulus package after the elections.

Democrats are also favored to come out of 14 hotly contested US Senate races with full control of Congress in Tuesday’s election, although the final results of at least five of those contests may not be available for days or even months.

“Right now the market is betting on a victory for Biden,” said Christian Stocker, senior equity strategist at UniCredit.

“Under a Biden presidency, the US economy should be more favorable to the stock markets – an economy with more stimulus packages will be fine for the outperformance of cyclical sectors.”

Stocks of major US banks, including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Goldman Sachs Group Inc, sensitive to the economic outlook, gained between 1.4% and 2% in pre-market trading.

The CBOE volatility index, the gauge of investor fear, fell for a second day after hitting a 20-week high last week on the surge in coronavirus cases around the world.

Yet competition in dynamic states is considered close enough that Republican President Donald Trump can still muster the 270 electoral college votes he needs to stay in the White House for another four years.

Investors are also bracing for wild market swings in case there is no immediate outcome Tuesday night due to an extended count or a contested outcome.

The benchmark S&P 500 has jumped about 55% since Trump won a thwarted victory in 2016 as lower tax rates under his administration boosted corporate profits.

As of 6:39 a.m. ET, Dow e-minis are up 419 points, or 1.56%, S&P 500 e-minis are up 39.5 points, or 1.2%, and Nasdaq e-minis 100 increased by 50.5 points, or 0.46%.

PayPal Holdings Inc fell 4.8% after forecasting lower than expected current quarter profit.

Investors will also look at the Federal Reserve’s two-day policy meeting and a monthly jobs report later this week.

Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Sagarika Jaisinghani and Anil D’Silva

Original © Thomson Reuters

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