Monday, May 23, 2022

Markets ignore U.S. insurgency to rally to Biden confirmation

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This is the web version ofBull leaf, a simple daily newsletter on what is happening in the markets. Sign up to receive it for free in your inbox.

Good evening, Bull Sheeters. It is Fortune financial reporter Rey Mashayekhi, replacing Bernard for the rest of the week with a special PM edition of the newsletter.

Conventional thought says that events like those sweated at United States Capitol Wednesdays are bad for the markets. They are supposed to sow chaos and uncertainty that make investors uncomfortable and force rating agencies to reconsider their sovereign credit ratings.

Well, not so fast. It seems that investors managed to keep his point of view, seeing yesterday’s violent insurgency on Capitol Hill for what it was: an ill-conceived, loathsome and ultimately toothless masquerade that had no chance of overturning the democratically elected result of the November presidential election. Ultimately, it is hard to fear uncertainty when it is virtually certain that Joe Biden to be sworn in as President of the United States on Jan 20.

But that doesn’t mean the markets haven’t accepted the overnight developments that saw Congress officially confirming Biden as the next President of the United States. If it is now too late for a peaceful transfer of power, we will indeed have a transition in two weeks—News that sparked a world rally on Thursday, with The main Wall Street indices all post record. Investors also appeared to be welcoming the Democrats’ double victory in the two US Senate second-round elections in Georgia, results that increase the likelihood of greater economic stimulus under a unified democratic government.

Without further ado, let’s take a look at today’s developments.

Market update

WE

  • It was a record day on Wall Street. After progressing by more than 300 points during the morning session, the Dow closed more than 200 points (+ 0.7%) to end the day at north of 31000. the The S&P 500 broke 3800 after climbing 1.5% on the day, while the The Nasdaq eclipsed 13,000 on a gain of 2.6%.
  • The feeling of probable reinforcement was positive data on the US service sector in December. There was less optimistic news on the unemployment front, where new unemployment claims remain high despite a slight drop last week.
  • Investors rely on more economic recovery after the Democrats took control of the Senate and took full control of Congress. This prospect sparked a fall in treasury bill prices, with 10-year yields exceeding 1%.
  • A Unified Democratic Congress could also revive Biden’s views on tax hikes, although investors have yet to retreat from the prospect of higher corporate taxes.
  • Lots of noise out of the Federal Reserve in the wake of yesterday Release of the minutes of the December FOMC meeting. Chicago Fed Chairman Charles Evans said he believes the central bank will keep rates close to zero until 2024, while his Philadelphia counterpart Patrick Harker thought the Fed will maintain its aggressive bond buying program until the end of the year. Richmond Fed Chairman Thomas Barkin, meanwhile, believe the government’s most ambitious stimulus measures are now behind.
  • Online lender SoFi East become public via a merger with a Special Purpose Acquisition Company (SPAC) which values ​​the startup at $ 8.7 billion.
  • Boeing will pay $ 2.5 billion in fines to resolve criminal charges related to 737 Max debacle, announced the Ministry of Justice.
  • American Express would be investigation by federal regulators for its business card sales practices, according to the the Wall Street newspaper.

Europe

  • the European scholarships posted gains at all levels. London FTSE picked up 0.2%, Frankfurt DAX climbed 0.6%, the CAC 40 in Paris gained 0.7%, and the pan-European rate STOXX 600 was up 0.5%.
  • The United States has suspended 25% import duties on French products worth over a billion dollars a year. Tariffs were imposed in retaliation on France digital services tax on American technology companies.
  • London based Aviation Signature seems to be the subject of a bidding war between American private equity giants Carlyle and black stone, with the two companies supposedly aiming for a takeover of more than $ 4 billion Bill Gatesbacked company.
  • In other news on mergers and acquisitions, the French IT consulting group Acts is supposed to watch a Acquisition of 10 billion dollars of the American rival DXC technology, according to Reuters.
  • Portugal is convinced that the European Commission will support a government bailout a national air carrier in difficulty TAP Air, according to the country’s finance minister
  • Prosecutors Denmark to have accused two UK nationals for a “meticulously planned fraud” for an alleged $ 1.5 billion swap scheme.

Asia

  • Tokyo Nikkei– which is trading at levels not seen in 30 years – climbed 1.6% on Thursday, while that of Hong Kong Hang Seng slipped -0.5% and South Korea KOSPI was up 2.1%. In mainland China, the main indices of Shanghai (+0.7) and Shenzhen (+ 1.1%) both posted gains.
  • The final days of the Trump administration see a lot of regulatory maneuvers against Chinese companies and their activities on the American coasts. The White House is considering develop a blacklist companies with alleged links to the Chinese military, with tech giants Ali Baba and Tencent would have in his sights. China, for its part, said it take your own retaliatory measures, if necessary.
  • the New York Stock Exchange East go forward with plans for deregister three Chinese telecommunications companies, reverting to an earlier decision to cancel the write-offs after objections from the Treasury Secretary Steven Mnuchin.
  • Chinese technological behemoth Baidu enters manufacture of electric vehicles after teaming up with the automaker Geely, according to Reuters.

Somewhere else

  • Gold slipped slightly.
  • the dollar rebounded, for a change.
  • Bitcoin broke $ 40,000 (!)
  • Crude oil pink with Brent settling north of $ 54 / bbl.

***

That’s all for the moment; please be sure to check out today’s readings below. Have a nice evening and see you tomorrow.

Rey mashayekhi
@ ReyM12
Rey.Mashayekhi@Fortune.com

As always, you can write tobullsheet@fortune.comor reply to this email with suggestions and comments.



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