DM Monitoring
NEW YORK: U.S. equities advanced noticeably in the election week, with the major averages posting their biggest weekly gains in months.
For the week ending Friday, the Dow rose 6.9 percent, while the S&P 500 and Nasdaq jumped 7.3 percent and 9 percent, respectively. Wall Street notched its best weekly performance since April.
The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly advance of 9.9 percent.
Investors were busy tracking election-related news during the week to look for clarity regarding the U.S. presidential and congressional election results.
The U.S. stock market has defied expectations of wild swings during the election week and instead has pushed convincingly higher, analyst at Zacks Investment Management, said in a note Saturday.
“Investors appear to be betting on a divided government, which would mean a falling likelihood of sweeping tax reform (higher corporate taxes) and major new regulations on big technology companies,” they said.
“The medium-term path for markets is more contingent both on fiscal stimulus and on vaccine approval and distribution rather than the election result,” said UBS analyst Mark Haefele.
Wall Street also digested the U.S. Federal Reserve’s latest policy decision.
The U.S. central bank on Thursday kept its benchmark interest rate unchanged at the record-low level of near zero.
“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said in a statement after concluding a two-day policy meeting, adding the path of the U.S. economy will depend significantly on the course of the coronavirus.
It decided to maintain the target range for the federal funds rate at 0-0.25 percent, pledging to use its full range of tools to support the U.S. economy “in this challenging time.”
The Fed slashed interest rates to near zero earlier this year in an effort to cushion the pandemic shock.
The coronavirus continues to present a headwind for markets.
The United States set a record of more than 126,400 confirmed cases in a single day on Friday, according to data compiled by Johns Hopkins University.
The total number of infections in the country has surpassed 9.8 million with the death toll exceeding 236,700 as of Saturday afternoon.
On the economic front, total nonfarm payroll employment in the United States rose by 638,000 in October, and the unemployment rate declined to 6.9 percent, the U.S. Bureau of Labor Statistics reported on Friday. Economists surveyed by Bloomberg had forecast an increase in jobs of 580,000.
U.S. initial jobless claims, a rough way to measure layoffs, came in at 751,000 in the week ending Oct. 31, following an upwardly revised 758,000 in the prior week, said the Department of Labor. Economists polled by MarketWatch had forecast a bigger decline to 728,000.
U.S. Services PMI (Purchasing Managers’ Index) registered 56.6 percent in October, 1.2 percentage points lower than the September reading of 57.8 percent, the Institute for Supply Management (ISM) reported on Wednesday. The reading fell short of market estimates.
“Investors appear to be betting on a divided government, which would mean a falling likelihood of sweeping tax reform (higher corporate taxes) and major new regulations on big technology companies,” they said.
“The medium-term path for markets is more contingent both on fiscal stimulus and on vaccine approval and distribution rather than the election result,” said UBS analyst Mark Haefele.
Wall Street also digested the U.S. Federal Reserve’s latest policy decision.
The U.S. central bank on Thursday kept its benchmark interest rate unchanged at the record-low level of near zero.
“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said in a statement after concluding a two-day policy meeting, adding the path of the U.S. economy will depend significantly on the course of the coronavirus.
It decided to maintain the target range for the federal funds rate at 0-0.25 percent, pledging to use its full range of tools to support the U.S. economy “in this challenging time.”
