US equity markets jump, Asia also higher
The blue wave buy everything trade’s momentum continued overnight. Following a strong showing by Asia yesterday, European and American markets piled into the trade once again, with Wall Street enjoying an outstanding day. The S&P 500 rose 1.78%, the Nasdaq climbed 1.85%, and the Dow Jones leapt 2.06% higher.
Early Asia has seen the Nikkei jump by 1.73%, but the Kospi rose by only 0.65%. Meanwhile, Australian markets are lower, with the ASX 200 down 0.30%, and the All Ordinaries down 0.50%. Overnight, both the South China Post and Bloomberg ran stories saying that China had effectively banned a massive swath of Australian exports, except the sacred cows of iron ore and gas. That is clearly weighing of local equities, and it should. This story will evolve once the US election passes.
Shanghai and Hong Kong markets are likely to open flat as well after the Ant Financial IPO was pulled overnight. China’s government appears to disagree with Mr Ma’s assertion the Ant Financial is a tech company and not a financial one. As a result, Ali Baba stock was pummelled overnight.
Asian markets are likely to have their eyes glued to the US index futures and will play follow the leader. We expect a choppy morning, and I’ll leave it at that. As election results roll in, we should have a clearer picture by midday Singapore time. By that I mean, we will know whether there is a clear winner, or whether we are facing the specter of a contested election for the presidency or the Senate. As for the presidency, the outcome will probably be positive for equity markets, regardless of whether the winner is Trump or Biden. This will not be the case if the makeup of the Senate remains unresolved. Such has been the momentum of the buy everything trades over the last 24 hours; the correction lower could be emotional.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.