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US Election: weird night when ‘Blue Wave’ failed to roll & Nasdaq futures surged

(New York) The US presidency still hangs in the balance, but investors are clear the result will be close and that Democrats will not enjoy a sweep that gives them White House and US Senate

US Election: weird night when ‘Blue Wave’ failed to roll & Nasdaq futures surged

(New York, our US team writes:) With the US election still too tight to call, here are our quick notes on what has happened so far.

There’s not been a big ‘Blue Wave’ as some pundits / polls had predicted and pollsters have had another election to forget. Presidential and Senate wins did not break early for the Democrats. But the idea that the election would be decided definitively and early was always likely an outside shot. It would have been the case had Biden won one or more of Florida, Georgia, and North Carolina – all big shouts that either haven’t happened or look unlikely to happen.  

In other words, an election that some predicted to be close has turned out to be close. Currently some pundits are saying it seems unlikely to be called tonight. It looks to hinge on results in states like Pennsylvania where postal votes will not begin to be counted until tomorrow, as well as Arizona, Wisconsin and Michigan, where results are not in yet.  

But markets still reacted to the fact that the ‘Blue Wave’ hit a wall. Equities had rallied the last two days and S&P futures had initially been up around 1% earlier in the evening, before falling as it became apparent the race would be much tighter than some had thought.  

But then weird things happened. Nasdaq 100 futures surged nearly 5% in the hours after the market close, in a wild reaction to a US presidential election that remained up in the air even after polls closed around the nation. 

The swift move even triggered a brief automatic trading pause, which was triggered when the futures rose 3.5% in less than an hour. The Nasdaq futures contract, which is a tracking mechanism heavily levered to the largest tech stocks, subsequently lost a measure of its gains, but remained substantially higher as of 11:30 p.m. EST. 

S&P 500 futures also rose substantially, gaining some 1.7% in the overnight session as of 11:30pm EST.  

Bloomberg columnist Conor Sen said ‘This is the Biden/GOP Senate trade imo.’ But it’s not clear what was driving this as trading volumes were not high. 

Also at the time of writing: WTI is up more than 2% and Asian markets are mostly up. The Asia Dow is up 15 points or 0.45% to 3,364.06. The Nikkei 225 is up 471 points or 2% to 23,769.73. The Sensex in South Korea is up 340.91 or 0.84% to 40,610.15. Only the Hang Seng is down slightly – 6.25 points or 0.03% to 24,933.48.  

The Asia Dow opened higher, then fell, and now his risen again. Hopes for a ‘blue wave’ victory by Democrats may have driven Asian stocks higher at their open, and then disappointment that it wouldn’t materialise pushed them down for a period.   

The US presidency still hangs in the balance, but investors are clearer now that the result will be a close one, and that Democrats will not enjoy a sweep that will control the presidency and the US Senate. Democrats are projected to retain control of the US House of Representatives. 

 

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