The Dow Jones rode the blue wave – and some decent PMIs – to a fresh high on Thursday afternoon.
Unshaken by the disturbing scenes on the Capitol last night, the confirmation of Joe Biden’s electoral victory, and the Democrat’s success in taking the Senate, gave the Dow a solid foundation for growth as the bell rang on Wall Street.
Its mood was then further enhanced by the latest ISM services PMI, which came in at 57.2 – not only better than the 54.5 forecast but an unexpected improvement on the previous month’s 55.9.
Rubbing its hands at the prospect of a potentially sizeable stimulus package once Biden is sworn in, the Dow Jones climbed 275 points, propelling it past 31,100 for the first time in its history.
As a reminder, by the end of last March, it had sunk below 18,200; even as recent as the start of November it was sitting shy of 27,000. Though the Republicans would arguably be the normal favourites of the right-leaning markets, Biden’s election victory – and the vaccine news that coincidentally followed soon after – has had a transformative effect on the Dow Jones et al..
The US open itself sprinkled a bit of goodwill cheer over the European markets, which had been flagging after an initially perky open. The DAX and CAC both rose half a percent, with the German bourse at its own record high, and a handful of points short of the 14,000 milestones.
In a reversal of what occurred early in the week, the FTSE was left lagging behind its record-chasing peers. Initially up as much as half a percent, and then down close to 0.8%, the UK index ended up flat on the day, moping around the 6,850 mark.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."