Wall Street Reacts to Anticipated Democrat Victory

January 06, 2021 13:00

US Democratic Senate candidate, Raphael Warnock, has been projected to win the first of two closely contested Senate races in Georgia.

Joe Biden’s control of the Senate, and with it the ability to govern with less opposition, for the next two years still depends on the result of the second race. However, the financial markets appear to be anticipating a Democratic majority.

The Democrats already hold a thin majority in the House of Representatives and if they were to do so in the Senate as well, a larger financial stimulus would be expected along with possible increases in tax and corporate regulation.

This expectation has been reflected in the markets, with NASDAQ100 CFDs down around 2% at the time of writing and 10-year US Treasury bond yields above 1% for the first time since March.

NQ100 H1 ChartDepicted: Admiral Markets MetaTrader 5 - NQ100 H1 Chart. Date Range: 24 December 2020 - 6 January 2021. Date Captured: 6 January 2021. Past performance is not necessarily an indication of future performance.

NQ weekly chartDepicted: Admiral Markets MetaTrader 5 - NQ100 Weekly Chart. Date Range: 18 May 2015 - 6 January 2021. Date Captured: 6 January 2021. Past performance is not necessarily an indication of future performance.

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