Biden’s election to U.S. stocks is about to collapse? Trump was “smacked in the face”
Trump, who claimed in the campaign that Biden’s election would lead to the “stock market doom”, may not have expected to be “smacked in the face” so quickly by reality.
Even compared with the stock market in the same period of successive newly elected presidents, the performance of U.S. stocks in the first three weeks after Biden’s victory was remarkable.
And the stock market’s “welcome” sentiment towards Biden peaked the day after Biden was recognized by the General Administration (GSA): the three major U.S. stock indices opened higher across the board, and the Dow Jones Industrial Average exceeded the 30,000 mark, creating a new milestone for U.S. stocks. stocks.
The New York Times commented that “the market has held a welcome party for Biden.”
Three weeks before his election, Biden’s U.S. stocks “started” better than Trump’s.
Trump often used the stock market as a barometer of his presidency, and most of the markets performed well during his administration. He touted it as his political achievement and warned in this year’s campaign that if Biden was elected, the stock market would collapse.
However, on the first trading day (November 9th local time) of Biden’s victory, the three major U.S. stock indexes opened high collectively, all of which hit record highs in intraday trading, with the Dow Jones Industrial Average approaching the 30,000-point mark at one time. Biden’s election and good news about vaccine have obviously boosted market sentiment.
Then, the day after GSA 23 officially notified Biden to start the handover, U.S. stocks ushered in a “highlight moment”.
On November 24th local time, the three major U.S. stock indexes opened higher across the board, and the Dow Jones Industrial Index broke through the 30,000-point mark, creating a new milestone for U.S. stocks. By the close, the S&P 500 index rose 1.62% to a new high of 3635.41 points.
The Dow Jones Industrial Average rose 1.54% to 30046.24 points, closing above 30,000 points for the first time. The Nasdaq Composite Index rose 1.31% to 12,036.79 points.
The Dow Jones Industrial Average broke through 308 points.
Although it is too early to say, the current stable and positive situation of the U.S. stock market is obviously contrary to Trump’s “prediction”. Moreover, some U.S. media also compared the stock market performance of Biden and Trump when he was elected horizontally.
According to Forbes magazine’ website on the 24th, in the three weeks after Biden’s election, the Dow Jones Industrial Average performed stronger than when Trump was elected president in 2016. During this period, the Dow Jones Industrial Index rose 6.1%. In the three weeks after Trump’s election, the Dow Jones Industrial Average rose only 4.3%.
Bloomberg expanded the time frame. According to its report on the 26th, the S&P 500 Index has risen 7.7% since election day, the second highest increase in 90 years and nearly three times Trump’s increase in the same period in 2016.
Bloomberg commented that Biden’s “opening” performance in the U.S. stock market made him comparable to any new president in U.S. history.
Bloomberg: Biden’s opening in the stock market is the highest in history
“What investors really welcome is the end of uncertainty”
The rise in U.S. stock futures after Biden’s election can indeed be seen as a “welcome party” held by the stock market for Biden, but as the New York Times reported on the 24th, “what investors really welcome is the end of uncertainty”.
According to the report, the news that the start of the White House power transition process, the smooth development of vaccine development and the nomination of former Federal Reserve Chairman Janet Yellen as Secretary of the Treasury have injected the market with “reassurgent” and positive signals. And Biden has become the beneficiary of this wave of market profit factors.
Previously, investors in the U.S. stock market experienced a period of turmoil. The report cited the volatility of the widely known Wall Street “Panic Index”, the VIX Index, which said it soared by more than 50% at the end of October as the outbreak in the United States spread again and the presidential election was approaching.
In the weeks after the election, the stock market began to rise steadily. In addition to Biden’s election reducing political uncertainty, several pharmaceutical companies’ candidate vaccines have shown good efficacy in trials also encouraged the market, the report noted. Because it means that the coronavirus epidemic may be contained in the coming months, people expect the economy to recover with it.
In addition, some investors believe that with Biden entering the White House and Republicans may continue to control the Senate, the Biden administration is likely to be governed by a divided Congress and a “conservative”-dominated Supreme Court, which investors can count on to prevent tax increases that may disrupt the market. . Michael Arone, chief investment strategist at Dowford Global Investment, said that in this case, some extreme policies on the right or left of the United States may be cancelled, “so the market is celebrating this.”
And as the Trump administration agreed to start the power transition process, investors were confident that “the election is finally over”. According to the report, many analysts believe that Trump’s previous words and deeds that the election are fraudulent and will eventually win the election “injected uncertainty into the market and curbed the stock market rise”.
The New York Times: The Market Holds a Welcome Party for Biden
In addition, the news that former U.S. Federal Reserve Chairman Janet Yellen will be nominated by Biden as Secretary of the Treasury also reassured the market. According to the report, Yellen is a well-known Wall Street figure. He is respected for his outstanding performance as chairman of the Federal Reserve from 2014 to 2018, and is considered a candidate for financial governors in the interest of the market.
