S&P 500 Futures Gain Over 1% As Biden Seals Victory in US Presidential Election

Summary

• It was markets’ first chance to react to US president-elect Joe Biden’s victory in 290 congressional constituencies
• Markets from New York to London to Tokyo saw an unusually high uptick
• Last week, S&P 500 registered a gain of 7.32 per cent to 3,509.44, while FTSE 100 amassed 5.97 7 per cent following the market wide per cent to 5,910.02

Stock markets across the world saw a strong rally after Democratic candidate Joe Biden defected incumbent Donald Trump in a nail-biting US presidential race on Friday. Biden, 77, is set to become the 46th president of the United States, while Senator Kamala Harris, 56, has been selected as the vice president-elect, which is a first for the country.

US stock markets witnessed a winning week with the Dow Jones Industrial Average and the broader benchmark S&P 500 rising nearly 7 per cent following the market-wide buying on the back of the elections. The markets across the globe saw an unusually high uptick in the respective broader stock indices in the last week.

US presidential election 2020 results

The nail-biting presidential election turned positive for the market after it was declared that Biden had successfully crossed the magic number of 270 Electoral College votes after winning the Pennsylvania state. The investors, traders and institutional investors too dived into the optimism. On Monday, Biden is expected to declare his Covid-19 task force.

S&P 500, DJIA, FTSE 100 rally

Interestingly, the Asian markets have extended gains on Monday usually tracking the upsurge in the futures linked to DJIA and S&P 500. The S&P 500 Futures were trading 1.42 per cent higher at 3,550.38, while the Dow Jones 30 Futures were up 1.24 per cent at 28,553, at 8:02 (GMT).

Prior to the vote counting, the New York Stock Exchange (NYSE) had assured its preparedness in handling the heightened volatility and turbulence in the US capital markets arising due to mega events. NYSE president Stacey Cunningham said the built-in market protections including the market-wide circuit breakers (MWCBs) and stock-specific limit up-limit down halts (LULDs) had performed exactly as designed when the markets tested historic levels of volatility during the early days of the coronavirus pandemic.

Last week, when the counting was on all the three major indices, recorded their best weekly performance since April. The S&P 500 registered a gain of 7.32 per cent to 3,509.44 from a level of 3,269.96, while DJIA surged as much as 6.9 per cent to 28,323.40 from a level of 26,501.60. Meanwhile, the FTSE 100 amassed 332.75 points or 5.97 per cent to 5,910.02 from a level of 5,577.27 in the corresponding stretch.

DJIA (1-week performance)

S&P 500 (1-week performance)

(Source: Thomson Reuters)

Shares of Walt Disney, the California-headquartered media conglomerate, also posted heavy gains in the last week following the buying optimism amidst the investors. The stock of Disney rose as much as 6.10 per cent to $127.46. While, on the other hand, shares of the California-based fast-food behemoth McDonald’s grew 1.88 per cent to $216.56.

Multiple large-cap stocks, constituents of Dow Jones and the Nasdaq, have posted substantial gains with the FAANG stocks rising 6 to 13 per cent in the last week. The stock of Massachusetts-headquartered social media giant Facebook witnessed the strongest spike among the FAANG components with the share price soaring 12.26 per cent to $293.41, while Netflix shares rose 6.32 per cent.