Trading Increased After Georgia Runoff Elections Results
Yesterday, in the Georgia runoff elections for two seats in the United States Senate, both Democratic candidates emerged victorious. With Vice President-elect Kamala Harris set to break any tie votes, the Democratic party now holds the majority in the Senate, and this change is already impacting the markets.
As of 9:30 this morning, all major stock indexes experienced gains. The Dow Jones rose by 0.47%, an increase of 144.6 points, the S&P 500 saw a boost of 0.83%, equivalent to 31.15 points, and the Nasdaq outperformed them all with a 1.31% rise, reflecting a 169.65-point increase.
Investors are showing optimism that a Democratic-controlled Senate might prioritize economic infrastructure investments, potentially including another economic stimulus package. According to Deutsche Bank economists, a Democratic Senate could result in a significant fiscal stimulus package being passed, potentially aligning with the new administration’s goals such as infrastructure development. This prospect represents a substantial upside to their GDP forecast, which currently anticipates a 4.3% increase year-on-year in 2021.
Stocks open higher as Dow looks to extend advance into record territory https://t.co/0SVhYGAwH8
— MarketWatch (@MarketWatch) January 7, 2021
The unrest on Wednesday evening, where a mob of supporters of President Donald Trump breached the capitol building in an attempt to disrupt the confirmation of Joe Biden’s election victory, further affirmed investors’ beliefs that significant changes are imminent in both the government and the economy by the month’s end.
Raymond James analyst Ed Mills emphasized the market’s focus on the inevitable shift happening on January 20, stating that the recent events do not alter the fact that Joe Biden is set to assume office. Attention is now shifting towards the policies and developments expected over the next two and four years, with regard to COVID-19, vaccine distribution, economic reopening, and the mandates of the newly elected Congress.
