By Noreen Burke
GossipMantri.com – A victory for Democrat Joe Biden in the U.S. presidential election will likely ease nervousness in financial markets this week, even as President Donald Trump refuses to concede and continues his legal battles against the outcome. But with Senate scrutiny still pending and the new resurgence of virus cases, market risks persist and the prospect of further economic recovery before January is unlikely. Investors will see appearances by several Federal Reserve officials, including President Jerome Powell later this week. Meanwhile, the earnings season is starting to end, but dozens of companies are still ready to report and Brexit talks drag on. Here’s what you need to know to start your week.
- Biden wins US presidency
The big networks declared Democrat Joe Biden the winner of the US presidential election on Saturday and although current President Donald Trump has said he will fight the results in court, his chances of overturning the election results are slim.
U.S. stock markets posted their biggest weekly gains since April last week, on bets Biden would win and Republicans would keep in the Senate. This scenario would create a firmer hand in the Oval Office and a Congress that would prevent Biden from implementing tax hikes or many new regulations.
As such, investors will now focus on two Senate races in Georgia ahead of the second round of elections in early January.
The significance of these races, which could eventually result in Democratic scrutiny of the White House, Senate and House of Representatives, means January is “the new November” in terms of the risk of electoral volatility, Michael Purves , founder and CEO of Tallbacken Capital, said in a note to clients.
- Resurgence of the virus
The United States on Saturday reported a record increase in coronavirus cases for a fourth consecutive day with at least 131,420 new infections, bringing the country’s total number of cases to around 9.91 million, according to a Reuters tally. The death toll in the country was more than 1,000 for a fifth consecutive day on Saturday, according to Reuters.
But despite the resurgence of virus cases, the prospects for a major fiscal stimulus package before January remain grim.
Democrats potentially have an incentive to wait until after second-round races in Georgia in January, when they could regain control of the Senate. This would allow them to advance their own spending agenda.
For their part, Senate Republicans will be able to block large-scale spending demanded by Democrats. U.S. Senate Majority Leader Mitch McConnell on Friday said economic data, including a drop in the unemployment rate, showed Congress should pass a smaller stimulus package.
- Wall Street welcomes Biden’s victory
Investors and prominent Wall Street figures on Saturday said they were happy with the election, ending days of uncertainty in which Trump made repeated statements of electoral fraud without providing evidence.
“Now is the time for unity”, JP Morgan General manager Jamie Dimon said in a statement. “We must respect the results of the US presidential election and, as we have done in every election, honor the voters’ decision and support a peaceful transition of power.”
Billionaire investor Bill Ackman wrote on Twitter, “There comes a point in the battle where the tent must be folded,” and urged, “Graciously yield and call for unity.”
In earnings news, some of the companies that will report in the next few days include McDonald’s (NYSE :), Softbank (T :), Beyond Meat (NASDAQ 🙂 and Tilray (NASDAQ 🙂 Monday and Walt Disney (NYSE :), Applied Materials (NASDAQ 🙂 and Cisco (NASDAQ 🙂 Thursday.
- Fed Speakers, Inflation Data
The US Economic Calendar features updates on inflation and consumer confidence as well as Thursday’s report on.
Friday’s jobs report showed that the U.S. economy created the fewest jobs in five months in October and more Americans are working part-time, the clearest indication to date that the recovery pandemic-induced recession loses momentum as fiscal stimulus dries up and new cases of the virus multiply. .
Several Fed speakers are due to make appearances this week, including Cleveland Fed Chairman Loretta Mester, Dallas Fed Chairman Robert Kaplan, Chicago Fed Chairman Charles Evans, Fed Chairman from New York, John Williams, Fed Vice President Randal Quarles and Fed Governor Lael Brainard.
Fed Chairman Jerome Powell is due to speak in a panel at the ECB’s annual central banking forum on Thursday.
- End of Brexit game
Britain and the European Union have until November 15 to try, once again, to reach an agreement on a trade deal on Brexit. Similar delays have happened before, but this one is important because the transition period – during which Britain remained in the customs union and the EU’s single market – ends on December 31.
Both sides say a deal can be reached, but the EU’s chief negotiator has warned of “very serious differences”.
He highlights the uncertainty the UK economy faces after the Bank of England announced a larger-than-expected stimulus hike last week to shield the economy from the ravages of new coronavirus lockdowns and Brexit.
As talks drag on, markets will also receive an update on the health of the economy from third quarter numbers on Thursday, as well as data on.