Wall Street Cheers on Confirmation of Joe Biden as President, Nasdaq Closes Above 13,000

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by Bhushan Akolkar · 3 min read
Wall Street Cheers on Confirmation of Joe Biden as President, Nasdaq Closes Above 13,000
Photo: Joe Biden / Instagram

As more clarity emerges about the Democrats taking control of both chambers, Wall Street focuses more on the arrival of the next fiscal stimulus ahead as Biden takes the chair on January 20.

On Thursday, January 7, Wall Street cheered as stock indexes continued to climb new highs. After all the drama that unfolded at Capitol Hill, Washington D.C, Congress finally confirmed the election of Joe Biden as President which also had an impact on the Wall Street sentiments.

The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) surged 2.56% of 320 points giving a close above 13,000 levels. While Apple Inc (NASDAQ: AAPL) stock surged 3.4, Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) surged just under 3%. Along with the tech stocks, banking giants like JPMorgan Chase & Co (NYSE: JPM) also advanced 3% on Thursday.

Other indices like the S&P 500 (INDEXSP: .INX) and Dow Jones (INDEXDJX: .DJI) also closed in green. All three indices ended the session on the new respective highs for the very first time.

Markets seemed to remain unfazed about the riots that took place in the US Capitol on Wednesday, January 6. Speaking to CNBC, Peter Boockvar, chief investment officer at Bleakley Advisory Group, said:

“There should be no mystery as to why the markets didn’t care about what happened in the Capital [on Wednesday], however disturbing, disgraceful, and embarrassing it was. It’s because it has no bearing on the direction of the economy, earnings and interest rates. It’s that simple.”

Later on Wednesday, lawmakers had already started the process of counting electoral votes while formerly declaring Biden as the winner.

Wall Street Focuses on Additional Fiscal Aid as Joe Biden Is Taking Charge

Having secured a slim majority in the Senate, the Democratic Party now has control of both Congressional chambers. Wall Street, thus, is focusing on the possibility of additional fiscal aid that can come as Biden takes charge.

“I think the reason the markets aren’t too flummoxed is it’s not going to change the transition of power,” Tom Lee, Fundstrat Global Advisors co-founder, said. In the recent runoff election in Georgia, Democrats defeated their Republican counterparts in one of the two elections held.

JJ Kinahan, chief market strategist at TD Ameritrade, noted that the election results give more clarity thereby “solidifying Democrat control in Washington and increasing expectations of more stimulus to come. With the political tensions easing, more stimulus expected to help boost the economy, and coronavirus vaccines helping bring a measure of calm to investors and traders, it seems that the market can now focus on earnings season,” he said.

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