Wall Street dips as Biden nears finish line

Wall Street dips as Biden nears finish line
Wall Street dipped after four straight days of rises as vote counting across US battleground states showed Joe Biden is heading for victory.
3 min read
06 November, 2020
Votes are still being counted [Getty]

Wall Street dipped Friday after four straight days of rises as vote counting across US battleground states showed Democrat Joe Biden poised for victory.

Previous sessions across the week had seen strong gains on US election developments and ahead of American jobs data, which Friday showed US unemployment drop a full point to 6.9 percent in October, a greater-than-expected fall.

The US economy also regained 638,000 jobs last month, far more than analysts had been expecting, despite rising coronavirus cases and Congress's failure to pass another spending package to aid the economy's recovery.

But the Dow Jones index was off around 0.5 percent 10 minutes into trading on Wall Street as the dollar lost more ground against the euro.

Oil prices pared back losses after initially falling back three percent after a volatile week, the US election sitting centre stage with President Donald Trump continuing to make unsubstantiated claims he is being cheated out of a poll win as Biden moves towards the victory line.

US media reported that the challenger had moved ahead by more than 5,500 votes in Pennsylvania after earlier edging ahead in Georgia. A victory in Pennsylvania would give Biden the presidency based on the Electoral College tally.

Despite some profit taking Friday, stocks have surged over the week on the prospect of a Biden win, on the assumption that would pave the way to a bigger fiscal stimulus package than if Trump was re-elected, noted Fawad Razaqzada, market analyst with ThinkMarkets.

Meanwhile a "Republican-controlled senate will make it unlikely that Trump's corporate tax cuts will be rolled back", he added.

Federal Reserve head Jerome Powell on Thursday said more US stimulus was "absolutely essential" to support the economy.

Heading into the election, Democrats and Republicans failed to reach a deal owing to disputes on the stimulus amount.

The prospect of further monetary easing measures from the Fed and a new stimulus have weighed on the dollar, however, boosting safe haven investment gold.

The rather less traditional haven of Bitcoin meanwhile "blitzed through $15,000 for the first time since the beginning of 2018... as investors rode a momentum trade that has been building up a head of steam ever since PayPal announced it would let users buy, sell and hold a variety of major cryptocurrencies", noted Neil Wilson, chief market analyst at Markets.com.

The best-known crypto unit was at $15,500 Friday afternoon for a day rise of four percent.

Tokyo was the highlight in Asia as the Nikkei jumped 0.9 percent for its highest close in 29 years.

Key figures around 1550 GMT

New York - Dow: DOWN 0.5 percent at 28,235.80

London - FTSE 100: UP 0.5 percent at 5,937.10 points

Frankfurt - DAX 30: DOWN 0.6 percent at 12,492.56

Paris - CAC 40: DOWN 0.4 percent at 4,963.04

EURO STOXX 50: DOWN 0.3 percent at 3,205.24

Tokyo - Nikkei 225: UP 0.9 percent at 24,367.35 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 25,712.97 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,312.16 (close)

Euro/dollar: UP at $1.1873 from $1.1832 at 2230 GMT

Dollar/yen: DOWN at 103.47 yen from 103.55 yen

Pound/dollar: DOWN at $1.3125 from $1.3150

Euro/pound: UP at 90.48 pence from 89.92 pence

West Texas Intermediate: DOWN 1.9 percent at $38.05 per barrel

Brent North Sea crude: DOWN 1.7 percent at $40.24 per barrel

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