UDespite the unrest in front of and in the Capitol in Washington, which did not leave Wall Street indifferent during the night, the German stock market posted record highs.
The standard value index Dax holds up well with a plus of 0.4 percent and climbed to 13,976.54 points. Futures trading on the S&P 500 index also indicates a recovery on Wall Street, even if it does not reach the highs of the previous day.
The prospect of a victory for the Democrats in the race for the Senate seats for the state of Georgia and the associated expectation of further help for the battered economy in the corona pandemic continues to act as a driver of share purchases on the stock exchanges. Because with a victory in the Senate race, the Democrats around the future President Joe Biden could rule through. This is seen much more positively in Germany than in America.
There the Dow Jones index closed 1.4 percent up for the first time in its history above the 31,000 point mark. But the turmoil in Washington instigated by Trump supporters and the interruption of the congressional session to confirm the election result had driven the much more important S&P 500 index from a record high of 3783 points. let go back to 3748 points.
The technology stocks had a negative impact. For example, Nvidia 6 or Apple lost 4 percent. The technology stocks index Nasdaq-100, which had initially made up for initial losses, closed 1.4 percent in the red with 12,623 points. However, shares in Chinese companies were particularly under pressure. JD.com lost 7.7 percent and Baidu 4.7 percent after the New York Stock Exchange wanted to exclude three Chinese telecom companies from trading.
Investors assume that the technology companies are viewed negatively by a democratic government. Here, competition policy considerations play a role. By contrast, solar stocks like Enphase, which rose 12 percent, were in demand. This also applies to shares of arms manufacturers, whose prices always rise when investors see a discussion about tougher arms laws imminent. Smith & Wesson gained 18.4 percent, Sturm Ruger 12 percent.
The control of the Senate should give the Democrats a good basis for the implementation of their legislative program, writes Paul O’Connor, head of the multi-asset department at Janus Henderson. In the short term, the financial markets would align themselves with other planned economic stimulus programs in the United States and, in the long term, with tax increases. In addition to fiscal policy, investor attention will shift to other areas of the Democrats’ political agenda, such as infrastructure spending, minimum wage increases, and stronger regulatory measures across many key industries.