The ASX is heading for a very modest start to trading ahead of the US election results after in the day and into the evening.
While Wall Street jumped by between 1.7% and just over 2% on hopes of a clear result that would clear the way for more stimulus spending relief, the ASX futures had the SPI up 20 points at 8am.
That was better than the 7 point dip in trading just before 6am.
But it does point to the fact that the ASX had its big rally on Tuesday with the ASX 200 ending up 1.9% or 115.1 points.
Gold and oil rose, the US dollar eased with the Aussie back over 72 US cents (and up around a cent over the session), despite the cut in interest rates by the Reserve Bank.
The market liked the $100 billion of quantitative easing spending over the next six months and focused on that rather than the RBA’s expected slicing of the cash rate to 0.10% from 0.25%.
The Dow rose 554.98 points, or 2.06%, to 27,480.03, the S&P 500 added 58.92 points, or 1.78%, to 3,369.16 and the Nasdaq ended up 202.96 points, or 1.85%, at 11,160.57.
It is looking a bit different now than four years ago.
On election night 2016, US stock index futures plunged as it became apparent Trump could pull an upset victory against Hillary Clinton.
But Wall Street accommodated and at times adulated the controversial Trump and the key S&P 500 rose 55% as Trump’s lower tax rates boosted corporate profits and share buybacks in 2018 and 2019 (but petered out in the back half last year).
Driving Wall Street higher this year since the March COVID-19 driven slide, has been the enormous rally in megtatechs like Apple, Amazon, Facebook, Twitter, Alphabet (Google), Microsoft and Netflix.
Their huge gains have lifted Wall Street and allowed Trump to claim it was due to his policies, but in many cases it was the switch to online transactions that did it as America was swamped by waves of COVID infections and over 230,000 deaths.
Now Wall Street and global markets await the judgement of American voters who seem to have made their viewers known in record numbers – 102 million people cast their votes by pre-poll voting or postal ballots before election day dawned.
Oil prices rose by near on 2% on Tuesday with Brent futures up 74 cents, or 1.9%, to settle at $US39.71 a barrel, while US West Texas Intermediate (WTI) crude rose 85 cents, or 2.3%, to settle at $US37.66.
The gains on Monday and yesterday have made up much of last week’s falls of 10% and 11%, but the factors that drove prices lower remain there – fears of another slide in demand thanks to COVID infections and rising supply from Libya and the US.
Helping power the gains was a 0.6% slide in the value of the US dollar against other major currencies as markets bet on a Democrat win. there’s now a belief the party could win the Presidency, the Senate and retain control of the House of Representatives. If that happens the part will be in a powerful position for the next four years.
The weaker greenback helped Comx gold in New York advance as well, settling up 0.6% to $US1,906.30 an ounce. That was up around $US14 an ounce. Silver also rose by around 0.6% and copper was up by 0.7% to just over $US3.09 a pound.
Iron ore though eased – down 97 cents to $US117.07 a tonne for 62% Fe fines delivered to northern China.
