No Clear Winner Yet Except For The Nasdaq

US American flag with a vote being posted in ballot box
Fiona Cincotta
By :  ,  Senior Market Analyst
Biden has claimed victory, Trump has claimed victory but counting continues in the key swing states. The reality is the US election remains up in the air.
 At the time of writing Joe Biden has 238 vs Trump’s 213 but the final result hangs on the key swing states and counting there continues. This could still take several hours until there is a winner.
The key development so far is that Biden has managed to take Arizona flipping the first state to Democrat, unlike when Trump took it from Hilary in 2016.  

No Blue wave, more uncertainty?
Congress is also going down to the wire with the Democrats not flipping as many seats as the polls had indicated in the Senate. This is key, because even if Joe Biden wins but fails to flip the Senate then political gridlock on Capitol Hill will likely continue. For the markets this means saying goodbye to that the massive fiscal stimulus package that a blue wave would have brought. Investors reining in stimulus expectations has put a slightly negative bias on market sentiment.

And the winner is…. the Nasdaq
US S&P 500 futures are trading marginally lower whilst the US Dollar index is 0.1% higher as as caution remains and investors prepare to watch what happens over the coming hours.
The clear outperformer has been the Nasdaq. The tech heavy index futures are trade +2%. A split Congress would mean making sweeping legislation and tightening regulation, which could harm these big tech companies, would be difficult. Furthermore, the tech stocks such as Apple and Amazon have acquired an almost safe haven like status given their resilient earnings even through the pandemic. As the political uncertainty continues investors are leaning towards these tech stocks lifting the Nasdaq.

Nasdaq Chart
The Nasdaq trades +2.5%, jumping above the descending trendline which has been in place since early October. The surge higher has also taken the stock over its 200 SMA on the 4 hour chart. These are bullish signs. Immediate resistance remains at the daily high of 11779. On the flipside support can be seen at 11450 200 SMA, prior to 11330 trendline support.

 

Market chart demonstrating how No Clear Winner Yet Except For The Nasdaq. Published in November 2020 by FOREX.com

Source: TradingView, GAIN Capital


Related tags: Tech Stocks Nasdaq Election

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