In this news, we discuss the U.S. stock futures dip, yen gains after final Trump-Biden debate.
(Reuters) – US equity futures fell and the Japanese yen rose on Friday after a final debate between US President Donald Trump and Democratic challenger Joe Biden only made investors more cautious about the approach elections.
The US S&P 500 E-minis EScv1 was down 0.1% to 3445.75 points at 02:30 GMT. The S&P 500 .SPX index closed down 0.5% at 3,453.49 on Thursday.
The dollar = USD rose a few pips, while the safe haven JPY = yen rose 0.1% to 104.71 per dollar.
“It was a bit more civilized debate this time around, but Trump failed to catch up on the first debate,” said Vasu Menon, senior strategist at OCBC Wealth Management in Singapore.
“Biden has done better than Trump in this debate and that should help solidify his lead over Trump and might just help him cross the final line with a victory.”
The final debate in Nashville, Tennessee on Thursday follows more than a week of choppy trading on Wall Street, with investors worried about whether Congress and Trump will approve another fiscal stimulus package ahead of the election.
Gary Ng, Natixis economist for Asia in Hong Kong, pointed to the slight strengthening of the US dollar index as a sign that sentiment has turned conservative due to the risk and uncertainty surrounding the election outcome.
After a recent decline, the S&P 500 remains up more than 3% since the two candidates’ first debate on September 29, with investors increasingly satisfied with a possible Biden victory as the Democratic candidate rose its lead in the polls.
Many investors in recent months have argued that a second term for Trump, which favors tax cuts and deregulation, would be good for the stock market.
The S&P 500 has risen more than 60% since Trump’s unexpected election victory on November 8, 2016, beating the gain of 42% in the first four years after Democratic President Barack Obama won in 2008.
Investors see Biden as likely to raise taxes, especially if Democrats wrest Senate control from Republicans. However, a Biden presidency, paired with a Democratic Senate, would likely mean a bigger fiscal stimulus package than a Republican Senate would agree to, many investors think.
Goldman Sachs estimated this month that under a Biden presidency, corporate profits would benefit from a fiscal stimulus and lower tariffs, which would more than offset the drag caused by a planned tax hike.
However, it is not clear how Wall Street would react to the election result. As the 2016 election approached, investors widely predicted that a Trump victory would hurt stocks due to its unpredictability and threats of a trade war against China and Mexico.
After Trump’s victory, the S&P 500 jumped 5% in one month, in what has been dubbed ‘Trump’s trade’, with investors betting the president would cut taxes and regulations and increase spending on infrastructure .
Since the increased use of mail ballots by voters concerned about the coronavirus could mean no immediate winner is announced, S&P 500 options show investors are bracing for volatility in November and December .
As of 12 days from the end, some 47.5 million Americans have returned the ballots, roughly eight times the number of early votes cast at around the same time before the 2016 presidential poll, according to data compiled by the US Elections Project.
Trump declined to say whether he would accept the election results if he loses, repeating his unfounded complaint that mail ballots lead to electoral fraud.
Reporting by Noel Randewich in San Francisco, Scott Murdoch in Hong Kong, Tom Westbrook and Anshuman Daga in Singapore; Edited by Vidya Ranganathan and Sam Holmes
Original © Thomson Reuters
Originally posted 2020-10-23 09:56:11.