NEW YORK, Nov 6 — Wall Street’s main indexes were set to take a breather today after surging more than 7 per cent this week as monthly payrolls data underlined the scale of the economic challenge awaiting America’s next president.
Democrat Joe Biden took a narrow lead over President Donald Trump in the battleground states of Georgia and Pennsylvania on Friday, edging closer to winning the White House in a nail-biting contest as a handful of undecided states continue to count votes.
The Labor Department’s closely watched report showed US employers hired the fewest workers in five months in October in the absence of new fiscal stimulus and as daily Covid-19 infections set new records in the United States.
US stock index futures trimmed some losses as the number of new jobs added beat economists’ forecasts, but S&P 500 e-minis were still down 0.26 per cent by 9:06 am ET. Dow e-minis and Nasdaq 100 e-minis shed 0.06 per cent and 0.58 per cent, respectively.
“The market has been up so much this week, it’s due for a break,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland.
The benchmark S&P 500 is on course for its best week since April, while the tech-heavy Nasdaq has jumped 6.5 per cent since the November 3 election as the prospect of a policy gridlock in Washington eased worries about tighter regulations on companies.
Matt Sherwood, head of investment strategy at Perpetual in Sydney, said markets had already moved to price in a Biden presidency and a divided Congress.
“We can get all of the good things about a Biden presidency, such as stable leadership and foreign policy, without any of the bad things from the far Left of his party, such as taxation,” he said.
Technology mega-caps including Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc edged lower in premarket trading after logging strong gains this week.
While a fiscal stimulus package is still widely expected post-election, the size of a deal reached in a divided Congress is likely to be smaller than it would be under a Democrat-led Congress. That could pressure the Federal Reserve to ease monetary policy further, analysts said.
The central bank on Thursday kept its loose monetary policy intact and again pledged to do whatever it can to sustain an economy crippled by the Covid-19 pandemic.
Cannabis-related stocks, which have been identified by analysts as potential winners under a Biden administration, were set to extend sharp gains from Thursday.
Coty Inc jumped 14.4 per cent as the cosmetics maker beat analysts’ estimates for quarterly revenue, while T-Mobile US Inc gained 5.7 per cent after adding more phone subscribers than analysts had expected in the third quarter.
Electronic Arts Inc slumped 7.1 per cent after the video game maker fell short of quarterly sales estimates. — Reuters
