- The Dow Jones rose 360 points on Wednesday, giving up a massive portion of its intraday gains.
- Hopes for more fiscal stimulus and positive economic data lifted sentiment on Wall Street.
- Senator Mitch McConnell dropped 150 points from the Dow for insisting that no stimulus deal was near.
The Dow Jones rebounded sharply mid-week after the White House did its best to keep hope for more coronavirus stimuli alive. Positive economic data also helped to reverse early losses after a predictably turbulent presidential debate.
Dow falls from peaks after McConnell poured cold water on stimulus
All three major US stock market indices rebounded today, with the Dow Jones leading the way. The Nasdaq and S&P 500 also rose over 1%.
There was lots of encouraging economic data Wednesday This is highlighted by strong ADP non-farm employment growth and an 8.8% increase in home sales. Second quarter GDP has also been revised higher, although the -31.4% figure seems unlikely to have upset the Dow bulls.
Instead, it was Treasury Secretary Steven Mnuchin’s hopes that kept the risk mood alive. The fact that The White House returns to the negotiating table indicates the desire of both parties to give the economy more fiscal stimulus.
Unfortunately, Senate Chairman Mitch McConnell torpedoed the Dow late in the session, declaring that the two sides would remain “far apart” on a deal. Check out the video below.
Biden debate causes Trump’s betting odds to drop
It is impossible to talk about and not mention the volatility in the stock market Last night’s presidential debate. The Dow futures rebounded and fell sharply overnight before today’s big jump.
Check out the video below to see the “highlights”.
Boris Schlossberg from BK Asset Management presented the following the blockbuster showdown between Joe Biden and President Trump::
Overall, Mr Biden has certainly surpassed low expectations of him and emerged the winner in almost every poll, if for no other reason than he was far more polite than the President, but he didn’t get the knockout punches and the general feeling after the The audience was reluctant to debate, and almost all agreed that they were more likely to witness a verbal brawl than an attempt to discuss politics.
Betting odds increased in favor of Biden after the debate. Trump has been attacking Biden’s cognitive skills for monthsDue to his inability to get a quick knockout punch during the debate, speculators lower his chances of winning.
As you can see in the table below, the release of the President’s taxes and the recent debate has changed the mood dramatically in recent days.
As the 2016 elections showed, the betting odds are not always right. The highly polarized nature of US politics makes it unlikely that any significant number of voters will be affected by any debate at this stage of the campaign. There are, however There is no question that analysts pay attention to trends.
That didn’t stop former Goldman Sachs CEO Lloyd Blankfein from considering the matter. He says Wall Street is warming to the idea of a higher tax regime under Biden. So far, there has been little concrete evidence that investors prefer either candidate.
Dow 30 stocks: Boeing rises again, Disney falls
On a tremendous day for the Dow 30Investors helped all but two stocks rebound that day. Disney stock was one of them, down 0.7% after 28,000 layoffs were announced. Nike lost 0.2% when it closed.
Check out the video below for a glimpse of what the downsizing could mean for Disney.
Elsewhere, sentiment was unanimously positive as Boeing and Goldman Sachs each gained more than 2%.