Wall Street cools as Biden nears finish line

NEW YORK: World markets lost momentum on Friday (Saturday in Manila) after four straight days of gains on Wall Street, as vote counting across US battleground states showed Democrat Joe Biden poised for victory.

US stocks from Monday to Thursday posted the best four-day streak since April, and Friday featured positive economic data for traders to peruse as unemployment dropped a full point to 6.9 percent in October, a bigger-than-expected fall.

The US economy regained 638,000 jobs last month, far more than analysts had been expecting, US Labor Department data showed, despite rising coronavirus cases and Congress’ failure to pass another spending package to aid the economy’s recovery.

But the Dow Jones index closed 0.2 percent lower, while the Nasdaq was flat for the day, as was the S&P 500. But despite the lackluster Friday, this week was the best since April with a gain of 7.3 percent for the S&P.

In London, the FTSE 100 was almost unchanged but still added six percent for the blue chip index’s best week since June, a similar pattern to other major European bourses.

Oil fell, with the WTI and Brent Crude falling back nearly 4 percent after a volatile week as US President Donald Trump continued making unsubstantiated claims he is being cheated of an election victory.

Latest vote tallies showed Biden is on his way to the White House.

Betting on Biden

US media reported that the challenger had pulled ahead in the key states of Pennsylvania and Georgia. A victory in Pennsylvania alone would give Biden the presidency, based on the Electoral College tally.

Despite some profit taking on Friday, stocks generally surged over the week as a Biden win became more likely, with traders betting on him paving the way for a bigger fiscal stimulus package compared to Trump, said Fawad Razaqzada, market analyst with ThinkMarkets.

While control of the upper chamber has yet to be determined, a “Republican-controlled Senate will make it unlikely that Trump’s corporate tax cuts will be rolled back,” he added.

Federal Reserve (Fed) chief Jerome Powell on Thursday said more US stimulus was “absolutely essential” to support the economy.

Democrats and Republicans failed to reach a deal before the election, owing to disputes over how much to spend.

The prospect of further monetary easing measures from the Fed and a new stimulus have weighed on the dollar, boosting safe haven investment gold.

Tokyo was the highlight in Asia, as the Nikkei jumped 0.9 percent for its highest close in 29 years.