Stock markets continued to push higher Thursday, November 5, on continued buying momentum following the United States election despite the still unresolved presidential contest, while the dollar slid as the Federal Reserve pledged to continue to support the economy.
There were no major developments in the US presidential contest, with 5 states still undeclared. Challenger Joe Biden is ahead in the Electoral College tally following wins in Michigan and Wisconsin, but vote counting continued in Pennsylvania, Arizona, Georgia, North Carolina, and Nevada.
“Investors largely ignored the heated debates and the uncertainty regarding the too-close-to-call states and that points to strong underlying buying pressure on the Street,” said Gorilla Trades strategist Ken Berman.
“All of the key sectors closed in the green following a clearly bullish session on Wall Street.”
Analysts have said the rally reflects enthusiasm at the apparent outcome of the election, which may leave Washington politically divided and pose a barrier to sweeping policy changes that could upset investors, such as tax increases.
US stocks have risen 4 days in a row, with the Dow, S&P 500, and Nasdaq all gaining at least 2% on Thursday.
Markets also are expecting additional fiscal spending in the US now that the election is over.
Virus spike ‘particularly concerning’
However, both the US and Europe are contending with rising coronavirus cases.
Europe has again become the worst-hit global region, and Romania became the latest government to announce tough new restrictions to counter the second COVID-19 wave washing over the continent.
Greece will go back into lockdown from Saturday, November 7, for 3 weeks to battle a second wave of the coronavirus, Prime Minister Kyriakos Mitsotakis announced.
Worries about the virus also continue to cloud the outlook in the United States, prompting the Federal Reserve on Thursday to reiterate its pledge to use all its tools to support the US economy.
The recent spike in COVID-19 cases is “particularly concerning,” Fed Chair Jerome Powell told reporters following the central bank policy meeting.
While the United States has done better than expected economically, the outlook “is extraordinarily uncertain,” he said.
The Fed chief warned that despite a jump in growth, “the pace of improvement has moderated” and spending has slowed, while the economy has regained just half the jobs lost in March and April.
“A full economic recovery is unlikely until people are confident that it’s safe to reengage in a broad range of activities,” he said.
That dovish posture weighed on the dollar, which fell sharply against the euro and other currencies.
Key figures around 10:30 pm GMT
- New York – Dow: UP 2% at 28,390.18 (close)
- New York – S&P 500: UP 2% at 3,510.45 (close)
- New York – Nasdaq: UP 2.6% at 11,890.93 (close)
- London – FTSE 100: UP 0.4% at 5,906.18 (close)
- Frankfurt – DAX 30: UP 2% at 12,568.09 (close)
- Paris – CAC 40: UP 1.2% at 4,983.99 (close)
- EURO STOXX 50: UP 1.7% at 3,215.56 (close)
- Tokyo – Nikkei 225: UP 1.7% at 24,105.28 (close)
- Hong Kong – Hang Seng: UP 3.3% at 25,695.92 (close)
- Shanghai – Composite: UP 1.3% at 3,320.13 (close)
- Euro/dollar: UP at $1.1832 from $1.1647 at 9 pm GMT
- Dollar/yen: DOWN at 103.55 yen from 104.66 yen
- Pound/dollar: UP at $1.3150 from $1.2947
- Euro/pound: DOWN at 89.92 pence from 89.96 pence
- Brent North Sea crude: DOWN 0.7% at $40.93 per barrel
- West Texas Intermediate: DOWN 0.9% at $38.79 per barrel