Despite a month of elevated volatility leading into the US Presidential Election – US stocks, in particular US tech stocks – have rallied strongly over the last week, with the Nasdaq Composite up 7.9%, the S&P 500 gaining 6.5% and the Dow Jones adding 6.11%.
These bullish market moves come as many media outlets have declared Joe Biden to be the winner of the 2020 US Presidential Election, despite impassioned Tweets from President Trump to the contrary.
Looking to the short-term, investors will likely be anxious to see if US tech stocks can continue to rally given their recent outperformance. Over the last five sessions, the Facebook share price has rallied more than 10%, Netflix has gained 7.35%, while Alphabet, Amazon and Apple all rose around 8%.
As we discussed previously, a clean sweep by the Democrats would have, according to one political commentator: been a day of reckoning for big tech. That day may no longer be on the horizon.
Moreover, while it seems that Trump has lost the Presidential race, the Republicans currently look as if they’ll hold onto the all-important Senate. Ultimately, this will make it difficult for Biden to pass many of his ‘anti-market’ policies Wall Street has been fretting over, including aggressive capital gains and corporate tax hikes and a potentially more critical stance on US big tech. Without this overhang, the market is likely to turn its attention back to fundamentals in the months ahead.
Australian market events in focus
With no major corporate earnings releases on the horizon for Australia, investors are likely to focus on several key economic data releases due out in the coming month.NAB is set to release business and consumer confidence figures on November 10, employment data covering October will be released on November 19, and the RBA will hold its next Monetary Policy Meeting on December 1.