Wall Street, however, acts as if it is an Ossoff victory, as investors strive to readjust their portfolios. In the long run, the Nasdaq fell 2.2%, while the yield on the US Treasury at 10 years rose for the first time over 1% in March.
Since November, investors have bet that the Washington government will remain divided, limiting more ambitious democratic political efforts that could affect corporate earnings and the stock market.
But with Democrats approaching 50 seats in the Senate, the calculation is changing.
“Markets appear to be troubled by the fact that a democratic analysis in the election for the Georgian Senate will lead to higher taxes, technological regulations, a stronger focus on the environment and greater movements to redistribute wealth,” said Stephen Innes, chief strategist. of the global Axi market.
Concerns about the crackdown on the technology sector are in the spotlight. Facebook stock is down 3% in premarket trading, while shares of Amazon, Apple and Google Alphabet parents fell by more than 2%.
However, the extent of the risk remains under debate. Alec Phillips, chief US economist at Goldman Sachs, said Wednesday that another 60 votes would be needed for a majority of Senate legislation. Bipartisan support “would, however, be needed to pass legislation on issues such as infrastructure, raising the minimum wage, regulating technology and environmental policies,” he said.
“While the changes are in the air for the US, changes in US law may not be very drastic,” Berenberg chief economist Holger Schmieding told clients, noting that more progressive bills could fall with moderate democracies.
In addition, a “blue wave” is expected to trigger another round of stimulus spending to support the economy during the pandemic – a big positive for the markets. Phillips said Goldman Sachs created another $ 600 billion “short-term” package in the scenario.
Oil prices hit their highest level in February
Saudi Arabia’s decision to voluntarily reduce oil production has brought global crude oil prices to a 10-month high.
Last: The kingdom said on Tuesday it would cut production by 1 million barrels a day from January levels.
“We are doing this voluntarily and we are doing this in order to support our economy, the savings of our colleagues,” Saudi Energy Minister Abdulaziz Bin Salman told a news conference.
Broadly speaking, the organization of oil-exporting countries and allied producers have agreed to keep production constant in February and March, CNN Business colleagues Charles Riley and Chris Liakos report. While Russia and Kazakhstan will produce more oil in the coming months under an agreement reached this week, the impact could be offset by the withdrawal of Saudi Arabia.
The news sent the gross future Brent, the global benchmark, to $ 54.24 per barrel. Prices have not been so high since February last year. US oil is trading at $ 50.24 a barrel.
However, beyond the headlines, analysts are concerned that disagreement between oil producers is growing as the pandemic continues. While some countries – such as Saudi Arabia – are worried that new bottlenecks and economic uncertainty could affect demand, others, such as Russia, are eager to pump again.
Rystad Energy analyst Louise Dickson said two factions had emerged from the OPEC + group.
“The division is a blow to the alliance, raising again the question of whether its members, with very different agendas and production structures, can continue to work together,” Dickson said.
The last time the group split in March was a short but intense battle for market share between Saudi Arabia and Russia, which led to falling oil prices.
Trump is once again facing China with a new executive order
President Donald Trump continues to put pressure on Chinese technology companies in the closing days of his administration – although it is not clear that his latest actions will have a real bite.
Remember: previous efforts on Chinese technology companies have turned upside down.
An order banning WeChat downloads in the United States has been temporarily blocked by a federal judge, and several courts have issued temporary orders against the administration’s attempts to ban the short video application TikTok.
The new order is also set to take effect in 45 days. That’s after Trump leaves office.
“The Trump administration is still rushing through its sanctions list to restrict the US-China relationship in the hope of causing China to retaliate, worsen ties and link [President-elect Joe] Biden’s hands, “said Scott Kennedy, a senior advisor at the Center for Strategic and International Studies in Washington. Although restrictions on these applications are meant to be” extremely disruptive, “it remains to be seen whether they will be implemented, he added. .
It follows
The December ADP employment report arrives at 8:15 AM ET. US oil stocks follow at 10:30 am ET.
Coming tomorrow: It is estimated that the initial applications for unemployment benefits will increase to 800,000.