President Trump has finally called his agencies and told them to cooperate as the General Services Administration acknowledged President-elect Joe Biden, winner of the presidential election. This news has powered up the risk-on rally as it has mitigated further risk for the stock markets. A formal process of transition of power has started now, and Biden’s team has been given access to briefing books and other government resources.
The news of the transition of power has had a positive influence on the European stock markets, and traders are ready to gain some lost ground as the European markets did close in negative territory yesterday.
The US futures are trading higher by over 200 points at the time of writing this research report, and this means that traders are set to push the Dow stocks back towards their record high. The uptrend for the Dow Jones and S&P 500 indices is strongly in place as both of these indices are making higher lows and higher highs—a traditional definition of an uptrend.
Sector rotation is still the key theme in the stock market as traders are shaving their profit from tech stocks, especially from work-from-home stocks. The sectors which are gathering immense momentum are energy, tourism, and healthcare. Basically, investors know now that we have three vaccines for coronavirus, which means that economic activity is highly likely to shift into a higher gear. The short-term hiccup is no longer the chief concern among traders as they are focusing beyond 2020 and betting on additional fiscal and monetary support.
Cruise-line operators and airlines have been the biggest beneficiaries of the vaccine news, and stocks in this sector have seen massive inflow. AstraZeneca was the latest pharma stock that has delivered positive news for the coronavirus vaccine. The economic data in the US has powered up and the economic numbers for this month are showing much stronger bounce back on the back of vaccine news. This has made traders position themselves for those sectors and stocks that are likely to be the most beneficial when lockdowns will end.
Speaking of lockdown, in Germany, the current restrictive measures are set to be extended as the government doesn’t want to flare up the numbers due to the Christmas period.
Above all these fundamentals, one key fundamental that is supporting the risk-on rally is the potential appointment of former Federal Reserve’s chairwomen, Janet Yellen, as the Treasury Secretary. Janey Yellen has a flawless track record, and she did a phenomenal job as the Fed chairwoman under the Obama Trump administration—the president who pulled the US economy out of its financial crisis.
In the forex market, we have seen a massive jump in the New Zealand Dollar as the prospects of another rate cut dropped. The central bank’s proposal says that house prices should become part of its remit.
As for the cryptos, out of the top three cryptos, Ripple’s XRP has the biggest momentum. It is literally blowing up, and the upward momentum is huge. On Friday, it was trading at 0.30, and over the weekend, it jumped massively, and now it is trading at 0.70. This is a phenomenal performance. As for Bitcoin, the crypto king is still hesitating to break above the all-time high. For the last few days, the price has very much started to consolidate, and the chances are that the Bitcoin price will cross above all-time high. We just need one big push.