What Wall St. Will Be Watching as the Votes Are Counted: Live Updates

Here’s what you need to know: The prospects for a new stimulus bill are expected to guide how Wall Street reacts.  Credit… Justin ...


Credit…Justin Lane/EPA, via Shutterstock

For months, investors have signaled that their No. 1 desire is more federal spending to keep the economy afloat in the face a pandemic that is now rapidly expanding.

So when the election season culminates on Tuesday, the prospects for a stimulus bill are likely to influence how Wall Street reacts.

With that in mind, here are four electoral outcomes and how investors might view them.

The potential for this result — with former Vice President Joseph R. Biden Jr. winning the presidency decisively and his fellow Democrats taking control of the Senate — fueled a short stock market rally in late September and early October.

The narrative was simple: If Democrats hold all the cards, the spending will be big.

Should it happen, stocks will probably rise along with expectations for economic growth. The impact will be evident in other markets, too: Long-term interest rates would rise, and the dollar would fall as investors bet on larger federal deficits and slightly higher risks of inflation.

Asterisks abound however. A blue wave also promises more legislation on taxes or regulation, so analysts think a thin Democratic majority in the Senate — the so-called light blue wave — that leaves some limits on the Democratic agenda might be a slightly better outcome for investors.

Conventional wisdom on Wall Street is that Washington gridlock is usually best for stocks, because it means the government is unlikely to do anything that hurts corporate profits.

But the coronavirus crisis and ensuing economic slump have prompted some soul-searching on this point, and many Wall Street analysts see a split decision on Tuesday — with Republicans retaining control of the Senate and Mr. Biden taking the White House — as potentially the worst outcome for financial markets that are hanging their hope on a stimulus bill.

“A Biden win with a Republican-controlled Senate would likely lead to much less fiscal stimulus, little public investment and no major tax changes,” analysts with the money management giant BlackRock wrote in a recent note.

Pollsters are putting a high probability on a Biden victory, but it is still possible that President Trump will win re-election.

It would most likely mean the Republicans also retain control of the Senate, while Democrats almost certainly still control the House of Representatives.

In short, nothing will have changed in the standoff over how much spending to authorize, and optimism about another large-scale near-term stimulus package could quickly evaporate.

On the flip side, though, a second Trump term would ensure that taxes on companies or the wealthy won’t be rising. Plus, Mr. Trump could replace the Federal Reserve chair, Jerome H. Powell, with someone who is much more in tune with the president’s preferred monetary-policy posture and something stock investors might love: low interest rates forever.

A vote that is so close in certain key swing states that the outcome hangs on litigation that will ultimately be resolved by the Supreme Court will be trouble for investors.

Even if Mr. Biden wins the election, President Trump has suggested on multiple occasions that he might not accept the outcome.

If Mr. Trump doesn’t concede, it’s hard to know when this fraught election season will end. In such an environment, there won’t be any progress on a stimulus deal, most likely delaying the arrival of any more help for the economy.

In other words, uncertainty that has weighed on markets in recent weeks will probably be projected out for the foreseeable future. That means the stock market would be in for another rocky ride until it’s clear who will lead the federal government for the next four years.

  • Stocks on Wall Street rallied on Tuesday, following European and Asian indexes higher and continuing a reversal from sharp losses last week when soaring rates of virus cases pushed governments to reimpose lockdowns across Europe.

  • Traders are temporarily turning their attention away from the pandemic and to the U.S. presidential election, as the last polls put Joseph R. Biden Jr. in the lead over President Trump. Tuesday is the final day of voting in an election that has already seen nearly 100 million votes cast.

  • Though the election has been marked by rising anxiety and uncertainty — in part because of concerns that the outcome will be contested or could lead to civil unrest — its resolution may mean lawmakers in Washington can return their focus to a stimulus plan to support the economy.

  • “The signal that the market cares about is that one way or another, more stimulus is likely coming, especially with rising virus case counts,” Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management, wrote in a note to clients this week.

  • The S&P 500 rose more than 2 percent in early trading on Tuesday, adding to a gain of 1.2 percent the day before. The gains have come after stocks plunged 5.6 percent in the last week of October, making it Wall Street’s worst week since March.

  • The Stoxx Europe 600 climbed 1.6 percent while Britain’s FTSE 100 index rose close to 2 percent. The Hang Seng Index in Hong Kong ended the day 2 percent higher.

  • The dollar dropped about 0.5 percent against an index of other major currencies, and the price of U.S. Treasuries fell as traders shunned traditionally safe assets, despite the possibility that the results of the U.S. vote may not be known for days.

  • “The more recent price action may suggest that the markets are once again positioning for a decisive Biden victory and even a ‘blue wave,’” in which Democrats win both houses of Congress, said Valentin Marinov, a currency strategist at Crédit Agricole. “A ‘blue wave’ could further fuel hopes for aggressive fiscal stimulus,” he added. This would lead to higher U.S. bond yields and a weaker dollar.

  • The mood in the markets also propelled oil prices higher. The futures price of West Texas Intermediate rose more than 3 percent on Tuesday. Saudi Aramco, the world’s largest oil company, said Tuesday that its profit had increased since oil prices crashed in the second quarter of the year but its net income for the third quarter was still about 45 percent lower than a year earlier, at $11.8 billion.

No matter who is elected, the next president will face an economy that is still reeling after the shutdowns last spring. Some areas have bounced back, but others remain deeply depressed, and millions of Americans are still out of work.


75.3%

Share of adults ages 25 to 54 who were working in September. That’s up from 69.7 percent in April, a 45-year low, but it’s still about as bad as in the worst of the Great Recession.

2.4 million

Number of Americans in September who had been unemployed for more than six months — what’s considered to be long-term unemployment.

824,000

Number of Hispanic women who have left the labor force since February. Service-sector job losses and school closures have been especially hard on Black and Hispanic women.

-3.5%

Change in gross domestic product from the end of 2019. G.D.P. rebounded from its spring plunge, but remains well below its prepandemic level.

+7.2%

Growth in consumer spending on goods from January to September. With nowhere to go during the pandemic, Americans are buying more stuff than ever.

-6.1%

Decline in consumer spending on services from January to September. Hotels, restaurants and movie theaters have reopened around the country, but sales are nowhere close to normal.

6.5 million

Annual rate of sales of existing homes in September, up 21 percent from a year earlier. The housing market has been fueled by ultra-low interest rates and city dwellers seeking more space.

-6.4%

Change in manufacturing output since January. U.S. factories weren’t hit as hard by the crisis as many other sectors, but like the rest of the economy they have seen progress stall in recent months.


Credit…Maxim Shemetov/Reuters

Saudi Aramco, the world’s largest oil company, said on Tuesday that its net income for the third quarter was $11.8 billion, about 45 percent lower than the period a year earlier. But compared with the second quarter, when oil prices crashed because of the effects of the coronavirus pandemic, the state-controlled company’s earnings improved nearly 80 percent.

“We saw early signs of a recovery,” Amin H. Nasser, Saudi Aramco’s chief executive, said in a statement. He also said that the global energy markets were facing “headwinds.”

Despite the lower earnings, the company said it would stick to its commitment to pay a hefty $18.75 billion quarterly dividend. The payout is substantially larger than the $12.4 billion cash flow for the quarter, meaning that the company is effectively borrowing to pay it, analysts say.

The company pledged to pay a $75 billion a year dividend during the prelude to its initial public offering last year. Most of the money goes to the Saudi government, which owns about 98 percent of the company.

Oil prices have come under renewed pressure in recent days as new lockdowns in countries such as Britain, France and Germany threaten the economic recovery and reduce fuel consumption.

Credit…Erin Schaff/The New York Times

With Election Day imminent, a prominent Texas business leader last week appeared to urge her employees to consider voting for Donald J. Trump and other Republican candidates.

Barbara R. Smith, chief executive of the Commercial Metals Company, a manufacturer in Irving, Texas, suggested on Thursday in a memo to workers that a Democratic president and Senate could diminish the company’s future earnings by $200 million a year.

“There are sharp differences between the two candidates’ approaches toward the economy, trade, national security and entitlements,” she wrote, adding, “I urge you to consider each party’s platform and its impact on this great company you have helped to build.”

The memo, a copy of which was reviewed by The New York Times, was distributed to thousands of Commercial Metals employees around the United States, according to one recipient.

The memo left some Commercial Metals employees uncomfortable, according to two people with knowledge of the reactions, leading Ms. Smith to clarify her intentions, one of them added.

In a follow-up note to employees on Monday, Ms. Smith told employees that “the candidates you vote for and the policies you support are entirely your own business, but whatever your political beliefs, what is most important is that you vote.”

In the original memo, Ms. Smith wrote that the company’s government affairs experts had reviewed the possible impact of various election outcomes, and found that a “unified government” scenario — involving a Democrat in the White House and at least three additional Democratic seats in the Senate — could lead to an increase in corporate taxes of up to 35 percent, a pivot to greener industries that could harm metals manufacturers and a removal of Trump-era tariffs that have benefited U.S. steel and aluminum companies. Those actions, taken together, could hurt the company’s bottom line, the analysis found.

Joseph R. Biden Jr. has said that if he were to win the presidency, he would push for an increase in corporate taxes to 28 percent from their current level of 21 percent under Mr. Trump. While Mr. Biden has embraced the idea of spending government money on renewable energy and has criticized Mr. Trump’s tariff policies for alienating allies, he has not taken clear positions on either a carbon tax or tariff reforms.

Credit…David Kasnic for The New York Times

The pandemic has shut down thousands of restaurants in cities across the country, prompting Eduardo Porter of The New York Times to ask: What will happen to America’s urban centers when the restaurants are gone?

Downtown restaurants in big cities are suffering the most. And it is urban America — the big cities and their downtowns that rely on restaurants as a fundamental social glue — that will feel the shock of their demise most intensely.

  • By Aug. 31, more than 32,000 restaurants and 6,400 bars and nightspots that had been open on March 1 were marked closed on Yelp.

  • In New York — perhaps the nation’s dining-out capital — a survey by the Hospitality Alliance found that 87 percent of restaurants were not able to pay all their August rent.

  • In September, the New York State comptroller estimated that one-third to one-half of the 24,000 restaurants in the city could close permanently over the next six months.

  • Forty-three percent of bars were closed on Oct. 5, and spending at those still open was down 80 percent from the same day in 2019, according to Womply, a company that provides technological platforms to small businesses.

Restaurants have been a key element of America’s urban transformation, helping draw the young and highly educated to city centers. This has often turned industrial and warehouse districts into residential areas. It has also overhauled many low-income neighborhoods, sometimes forcing longtime residents out of town.

High-tech industries and their well-paid jobs have undergirded these changes, but social and cultural establishments have also proved pivotal. Already in the last two decades of the 20th century, cities with more restaurants and theaters per person were growing faster than their peers, notes a study by the economists Edward Glaeser, Jed Kolko and Albert Saiz, even as rents grew faster than wages.

The demise of restaurants weakens the central economic pillar of superstar cities: the gain in productivity that comes from having many smart, young, creative people sharing ideas in the same place.

Credit…Jim Wilson/The New York Times

Voters across the country are weighing in Tuesday on dozens of ballot initiatives. At a time of sharp economic inequalities, a number of the proposals bend toward a progressive view of taxes, with higher rates for companies and wealthy individuals.

Here are the ballot initiatives related to business and economics that we’re watching:

  • California’s Proposition 22 would allow ride-share and delivery companies to classify drivers as contractors, not employees.

  • California’s Proposition 15 would amend the state’s Constitution to raise billions of dollars for schools and local governments by lifting the protections for commercial property owners enshrined in a landmark 1978 ballot initiative.

  • California’s Proposition 21 would allow cities to enact rent control measures on almost all rental housing that’s more than 15 years old.

  • Florida’s Amendment 2 would increase the state minimum wage to $15 in 2026 from $8.56 in 2020.

  • Illinois’ Allow for Graduated Income Tax amendment would replace the state’s flat income tax of 4.95 percent with graduated taxes that would range from 4.75 percent to 7.99 percent.

  • Arizona’s Proposition 208 would tax higher-income taxpayers to funnel money into public schools. It would allow an income tax surcharge of 3.5 percent on single filers making above $250,000 and joint filers earning more than $500,000 in addition to the existing 4.5 percent income tax.

Source link

COMMENTS

Name

Africa,702,Americas,3712,Art & Culture,13863,Arts,6239,Arts & Design,1477,Asia,3049,Automobile,399,Baseball,484,Basketball,378,Books,3640,Business,5061,Celebrity,2529,Cricket,532,Crime,95,Cryptocurrency,1278,Dance,565,Defense,743,Diplomatic Relations,2411,Economy,969,Editorial,260,Education,1075,Elections,287,Energy & Environment,2919,Entertainment,21629,Environment,3390,Europe,3966,Faith & Religion,182,Family & Life,715,Fashion & Style,2998,Finance,18320,Food & Drink,3499,Football,999,Games,57,Gossip,10163,Health & Fitness,3813,Health Care,770,Hockey,165,Home & Garden,818,Humour,846,Latin America,49,Lifestyle,15679,Media,434,Middle East,1366,Movies,1555,Music,2415,Opinion,2539,Other,10686,Other Sports,4796,Political News,11055,Political Protests,2202,Politics,16898,Real Estate,1641,Relationship,59,Retail,3013,Science,2376,Science & Tech,9230,Soccer,135,Space & Cosmos,252,Sports,10918,Technology,3212,Tennis,489,Theater,1510,Transportation,235,Travel,2409,TV,3441,US Sports,1352,Video News,3531,War & Conflict,945,Weird News,929,World,15010,
ltr
item
Newsrust: What Wall St. Will Be Watching as the Votes Are Counted: Live Updates
What Wall St. Will Be Watching as the Votes Are Counted: Live Updates
https://static01.nyt.com/images/2020/11/03/business/03markets-brf-marketselection/merlin_179209275_d7e2016c-0ef3-4cc3-af51-f793db106786-facebookJumbo.jpg
Newsrust
https://www.newsrust.com/2020/11/what-wall-st-will-be-watching-as-votes.html
https://www.newsrust.com/
https://www.newsrust.com/
https://www.newsrust.com/2020/11/what-wall-st-will-be-watching-as-votes.html
true
732247599994189300
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content