Global stocks jump as Trump authorises Biden's presidential transition process to begin
- Global stocks jumped on Tuesday after Donald Trump authorised President-elect Joe Biden's presidential transition process to begin.
- Trump took a significant step toward acknowledging the election result on Monday evening, but is still convinced he and his allies can continue to contest the outcome.
- Biden's planned nomination for former Federal Reserve chair Janet Yellen as Treasury Secretary is another key driver boosting market sentiment.
- AstraZeneca's vaccine is helping drive oil prices to their highest levels since March.
- Visit Business Insider's homepage for more stories.
Global stocks rose on Tuesday as investors were broadly upbeat on President Donald Trump signalling that Joe Biden and his team can begin the formal transition process ahead of January's inauguration.
Trump inched closer to conceding the presidential election on Monday evening right after his General Services Administration chief Emily Murphy recognised Biden as the apparent winner.
Key for markets is that the smoother the transition, the easier it will be for the new administration to hit the ground running in January, which is vital given the deadly surge in cases of COVID-19 across the United States, and the planning needed for a nationwide vaccine rollout, said Connor Campbell, a financial analyst at SpreadEx.
Biden's plans to nominate Janet Yellen as Treasury Secretary was another key driver for markets. If her nomination is confirmed by the Senate, the former head of the Federal Reserve would be the first woman to hold the job.
Since the Fed has adjusted its view of the labor market to a much wider social context of full employment, Yellen as Treasury Secretary and Jerome Powell as head of the central bank is an "exceptionally dovish combination," said Stephen Innes, chief global market strategist at Axi.
"It is not because of pressure to add to the policy, but rather because both have the same views on jobs," Innes said. "They have witnessed policy mistakes like 'Taper Tantrum' and gnarly market impacts of early rate hikes. There will be a mutual agreement for lower [rates] for a very, very long time. And that cohesion will be good for the market in general," he said, referring to past instances in which the Fed began to tighten monetary policy and inadvertently sent financial markets into a tailspin.
The rand was last trading at R15.35/$.
Asian markets were also buoyed by Trump's overnight move that seems to remove ambiguity over the presidential succession. Japan's Nikkei rose 2% and Hang Seng rose 0.4%, but China's Shanghai Composite slid 0.3%.
In Europe, stocks got a lift as well from a pickup in German GDP, which grew by a record 8.5% in the third-quarter. The rebound in the eurozone's' biggest economy was largely driven by household spending and strong exports.
AstraZeneca's vaccine is still among the oil market's greatest COVID-19 equalizers as prices hit their highest levels since March. Brent Crude rose 0.7%, to $46.37, and West Texas Intermediate rose 1%, to $43.44.
UBS' Mark Haefele recommended that investors diversify into the next leg of the recovery, by increasing exposure to select cyclical sectors that have lagged so far during 2020.
Read the original article on Business Insider
Receive a daily news update on your cellphone. Or get the best of our site emailed to you.
Go to the Business Insider front page for more stories.