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Summary
- Democratic presidential candidate Joe Biden is closer to the winning mark of 270 seats while current President Donald Trump is trailing.
- Investors are hoping for the ballot counting to quickly result in a clear winner as past experiences show that delayed election results impact stock markets.
- The S&P 500 index climbed nearly two per cent on Thursday, while the tech-heavy Nasdaq composite index was up almost three per cent and the New York Stock Exchange composite index spiked close to two per cent.
- The benchmark Canadian index of S&P/TSX composite jumped about 1.87 per cent on Thursday, extending its rally for the fourth day in a row.
The 2020 US presidential elections are yet to pronounce a clear winner, but the impact of the counting process is already noticeable on the stock markets across North America. The counting of ballots initiated on Tuesday, November 3, and so far, Democratic presidential candidate Joe Biden is closer to the winning mark of 270 seats.
In general, investors are hoping for a quick result of the presidential elections as a stretched-out process has led to stock markets registering a slump in the past. But with US President Donald Trump sticking to his promise of challenging the ballots in the Supreme Court in case of a loss may see the vote counting process drag on.
Let’s take a look at how stock market indexes are doing so far.
Where Do North America Stock Markets in Stand?
The North American stock markets reflected a rise in November even before the ballot counting began on Tuesday. The rally, some market analysts suggest, stems from the expectation of the White House getting a “clear winner” soon.
The S&P 500 index, which includes the top 500 publicly traded companies in the United States based on their market cap, climbed nearly two per cent on Thursday, November 5. Since recording a sharp dip at the end of October, the index rose by over seven per cent so far in November.
The index saw a growth of about 8.66 per cent this year and up 4.38 per cent quarter-to-date (QTD).
YTD chart of S&P 500/ Source: EODHD/Others, Thomson Reuters
Tech-heavy Nasdaq composite index jumped nearly three per cent on Thursday. In November so far, the index soared by almost nine per cent. The Nasdaq composite is up about 33 per cent this year-to-date (YTD).
The New York Stock Exchange composite index spiked close to two per cent on Thursday. The broad-based index tumbled to a low of 12,429.33 at close on Friday, October 30, but has since rebounded by over six per cent in a week’s time.
The New York Stock Exchange composite currently registers a YTD decline of about five per cent.
Tracking the stock performance of top 30 large companies in the United States, the Dow Jones Industrial Average index was up about two per cent on November 5. It shot up over seven per cent this month.
Like other North American stock indexes, the Dow Jones had also registered a steep fall during the coronavirus pandemic-led market crash back in March and is currently trading flat this year.
In Canada, the S&P/TSX composite index jumped about 1.87 per cent on Thursday, extending its rally for the fourth day in a row. The index dropped to a low of 15,580.6 on Friday, October 30, and has since bounced back almost five per cent in a week.
The benchmark Canadian index is down 4.48 per cent this year but posts a growth of 4.61 per cent month-to-date (MTD).
TSX Sectors Gain Ahead Of US Elections Results 2020
The health care sector shot up about six per cent on the Toronto Stock Exchange (TSX) on Thursday. The spike comes as cannabis stocks such as Aurora Cannabis (TSX:ACB) and Canopy Growth (TSX:WEED) rallied in the wake of Biden leading in the election race. The former US vice president has promised to legalize adult-use recreational cannabis at a federal level if he comes to power, a move that Canadian pot companies are looking forward to for the expansion of their business in the US market.
Both the industrial and information technology sector on the TSX posted a climb of about two per cent on the TSX.
Pot manufacturers and clean technology industries are counting for the 2020 US presidential elections to end with Joe Biden’s Democrat administration coming to power in the White House. Natural gas and oil companies, on the other hand, are hoping for the return of Donald Trump’s Republican administration. While keeping in mind that future stock movements are hard to predict and influenced by multiple factors, the outcome of this US presidential election could impact the markets in coming days.
