4:05 pm: US equities close flat in mixed session
US stocks closed slightly down in a mixed session amid uncertainty about the official outcome of the presidential race which indicates that Democrat Joe Biden is poised for victory.
In addition, market sentiment was kept in check by better-than-expected US unemployment data.
On the day, the Dow Jones Industrial Average fell 66 points, or 0.24%, to 28,323. The S&P 500 declined 0.03% to 3,509 but the tech-heavy Nasdaq increased 0.04% to 11,895.
12:25 pm: Despite some struggles today, US markets on pace for strong week
US markets sputtered to start the day but has climbed a bit over the course of the morning. The Dow was down 66 points, 0.2%, at 28,323.3, after being roughly 200 points in the red earlier. The Nasdaq Composite was down 28 points to 11,862, and the S&P 500 slipped 5 points, 0.15%, to 3,505.
A new jobs report was released Friday morning, showing 638,000 jobs added last month and an unemployment rate decline to 6.9% from 7.9%, per the Bureau of Labor Statistics.
"Seeing as election fever has gripped America and the rest of the world, the US jobs report took a back seat today," CMC Markets UK analyst David Madden wrote Friday. "...It is looking more and more likely that Joe Biden will win the US presidential election. Donald Trump has made allegations of postal voting fraud so it looks as if he will contest the outcomes in various states, and that could pave the way for a drawn out legal battle."
Zooming out, the major indices are on pace for their best week in months. The Dow and the S&P 500 were up 6.8% and 8.1%, respectively, on the week. The Dow has gained 6.5% week to date, acccording to CNBC.
10.00am: Proactive North America headlines:
Mirasol Resources Ltd (CVE:MRZ) (OTCPINK:MRZLF) (FRA:M8R) looking at how to advance its Nandi copper project in Chile after encouraging exploration
Silvercorp Metals' Inc (TSE:SVM) (NYSEAMERICAN:SVM) (FRA:S9Y) second-quarter 2021 earnings surge 27%; on track to meet its annual production and cost guidance
American Manganese Inc (CVE:AMY) (OTCPINK:AMYZF) (FRA:2AM) buys specialized reactor from Asia to make cathode material as it bids to optimize its battery re-cycling process
Humanigen Inc (NASDAQ:HGEN) (FRA:0KB2) announces positive interim Phase 3 data on lenzilumab to treat patients hospitalized with COVID-19
Matinas BioPharma Holdings Inc (NYSEAMERICAN:MTNB) (FRA:6LJ) flush with $62.8M in 3Q to fund development of MAT9001 and MAT2203
9.42am: Wall Street on back foot
The main indices on Wall Street have started in negative territory on Friday, although the decline was less than some had predicted as the presidential election began to show signs of a conclusive result.
In the first minutes of trading, the Dow Jones Industrial Average was down 61 points at 28,328, while the S&P 500 was 12 points lower at 3,498 and the Nasdaq fell 66 points to 11,824.
The decline followed news that Joe Biden has taken the lead in the critical swing state of Pennsylvania as almost all votes have been counted. The Keystone State’s 20 electoral college votes will secure Biden the presidency, although he also currently leads in Nevada, Arizona, and Georgia which will add to his victory margin.
One outlet has already called the presidency for Biden, meaning it is now unlikely that Donald Trump will be able to secure enough states to secure the votes he needs to remain in power.
Away from politics, traders may also find some optimism from the US non-farm payrolls for October, which came in slightly better than expected. The report showed non-farm payrolls were up 638,000 for the month, above forecasts but still down on the previous month’s figure. October’s figure is stronger than it looks as it included a 147,000 drop in temporary Census employment.
8.12am: Wall Street heads for lower open
Wall Street is expected to begin Friday’s session in the red as the initial burst of positivity following election day appears to be fizzling out as the result remains too close to call.
Spread-betters are expecting the Dow Jones Industrial Average to open around 233 points lower, while the S&P 500 is forecast to drop 33 points and the Nasdaq is predicted to fall 135 points.
The old market adage of ‘buy the rumor, sell the fact’ is perfectly applied this week, says market analyst Craig Erlam at Oanda.
“Undeterred by the prospect of long-drawn out legal challenges and recounts, stock markets rallied strongly from the word ‘go’ this week, ignoring the noise and instead rejoicing in an election result that delivers stability and no major overhauls as far as policy is concerned.”
Indeed, as it stands, Joe Biden is close to achieving the necessary electoral college votes to defeat an incumbent president for only the fifth time in the last hundred years, though counts are still ongoing and Trump’s team have filed lawsuits in at least five states.
“I’m pleased to say though that what I’ve seen is general disgust at what Trump is trying to do,” said analyst Marshall Gittler at BDSwiss.
“Even such Trump allies as Fox News and the Murdoch-owned NY Daily Post are pointing out that there is no evidence of fraud whatsoever. Most of the suits have been laughed out of court. The Michigan Attorney General’s office described Trump’s request as an ‘attempt to unring a bell’.”
US stocks are also being sold but not heavily, as a split Congress is going to make it very difficult for a potential Biden administration to deliver as big an economic stimulus, as well as his more ambitious policies, though many of which were widely viewed as market negative.
Markets are viewing a smaller potential stimulus as “a small price to pay for stability”, said Erlam.
Though Gittler says the ‘mauve’ result will see Republicans probably block Biden’s plans for tax hikes and more regulation Democrats will also have to nominate more centrist people for the Cabinet than they might wish, meaning a boost for drug companies, health insurers, and tech companies.
Four things to watch for on Friday:
- Once again the election results are likely to dominate, with final results expected from Georgia, Nevada, Pennsylvania, North Carolina, Arizona and Alaska. Biden currently holds leads in Georgia, Nevada and Arizona, two of which will secure his victory in the electoral college
- Macro data is also in focus will the all-important non-farm payrolls for October. Forecasts are predicting the US economy will have added around 510,000 jobs in the month, down from 661,000 in September.
- Also holding attention will be the US unemployment rate, which is predicted to have fallen to 7.7% in October from 7.9% the previous month, although it is still highly elevated
- In the earnings calendar, investors can expect quarterly figures from pharmacy group CVS Health Corp (NYSE:CVS) and hotel chain Marriott International Inc (NASDAQ:MAR)