Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Indexes  >  USA  >  S&P 500    SP500

S&P 500

(SP500)
Delayed Quote. Delayed USA - 11/23 05:02:26 pm
3577.59 PTS   +0.56%
Pre-market
0.82%
3606.91 PTS
04:16aGlobal stocks rise as investors cheer Biden transition, vaccine progress
RE
03:02aWALL STREET STOCK EXCHANGE : BlackRock ups U.S. stocks to overweight, bullish on tech
RE
02:53aGermany's DAX to expand to 40 members from 30 in index shake-up
RE
SummaryQuotesChartsNewsHeatmapComponents 
SummaryMost relevantAll NewsNews of the index componentsMarketScreener Strategies

Investors' bold bets on Biden win pose market risk

10/23/2020 | 01:58pm EST
U.S. Democratic presidential candidate Joe Biden and his wife Jill Biden arrive at New Castle Airport, following the final 2020 U.S. presidential campaign debate

NEW YORK (Reuters) - With less than two weeks to go before the U.S. presidential election, investors may be placing too much confidence in a decisive win by Democratic challenger Joe Biden as his lead in opinion polls narrows.

Market participants have in recent weeks pulled back from bets that would benefit from election-related volatility while piling into assets that would benefit from a Biden win, including alternative energy shares and cannabis stocks.

As Biden's lead has narrowed in recent days, some market watchers worry that an unexpected victory by President Donald Trump, a Republican, or an uncertain election outcome could force the type of violent positioning unwinds that occurred in 2016, when investors were overwhelmingly positioned for a Hillary Clinton presidency.

In betting markets, Trump's chances of winning the election increased about 1 percentage point to 36.3% following Thursday's debate, but Biden maintains a significant lead, with a 64.4% chance of winning the election, according to data from RealClearPolitics.

"To some extent the markets are under-appreciating the likelihood of a Trump rebound here," said Karl Schamotta, chief global strategist at Cambridge Global Payments.

Following the election, traders expect the biggest market swings to occur in equities. Among the assets vulnerable to violent moves is the Invesco Solar ETF. The exchange-traded fund has risen about 24% over the last month as investors anticipate that clean energy policies under a Biden administration would bode well for the sector.

Options prices suggest the ETF's shares could log a one-day move of as much as 11% in either direction once the election results are out, according to calculations by Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.

The technology-heavy Invesco QQQ Trust Series 1 ETF and the S&P 500 tracking ETF SPDR S&P 500 ETF Trust are each primed for a move of about 3% to 4%, Murphy said.

An unexpected Trump win could also hit currencies such as the Mexican peso and Russian ruble, while boosting the battered U.S. dollar, analysts said.

Utility firms, tax-exempt municipal bonds, industrials and material stocks may also be vulnerable, said Justin Waring, investment strategist at UBS Global Wealth Management.

Treasury yields, which move inversely to prices, rose to four-month highs on Friday, a day after Biden and Trump squared off in a final debate that some observers said was unlikely to improve the incumbent's re-election prospects.

Some investors believe a Biden win could usher in higher spending and weigh on bonds.

Some market watchers have also noted that investors, while still far more hedged against markets swings than in the 2016 election cycle, have pared bets on wild stock market gyrations over the past two weeks.

S&P 500 options expiring in December are implying a more muted level of stock swings than they did just two weeks ago, suggesting expectations for market turmoil following the election have come in.

Equity and interest-rate options "are pricing in that Biden wins the presidential election," said Amy Wu Silverman, equity derivatives strategist at RBC Capital Markets. "They're fairly complacent on that, as well as the idea of a 'blue sweep.'"

While the market fears of election-related volatility have receded somewhat, by no means have investors sounded the all-clear signal. The Cboe Volatility Index, known as Wall Street's "fear gauge," stands above 28, significantly higher than the low to mid-teen range it was trading in just prior to the 2016 presidential election.

An uncertain or contested election would likely result in even more sustained volatility. The S&P 500 slipped as much as 10% in the weeks following the 2000 election, before the Supreme Court decided the hotly-contested battle between George W. Bush and Al Gore for the presidency.

Such a period of uncertainty could hit the market's biggest winners, including the technology and momentum stocks that have been a key driver of the S&P 500's rebound, said Joseph Amato, president and chief investment officer of equities at Neuberger Berman Group PLC.

"If you have a risk-off environment because of a contested election then you probably have vulnerability on those stocks that have done the best," Amato said. "Quite often in a risk-off scenario you often sell your big winners first."

(Reporting by Saqib Iqbal Ahmed and April Joyner; Editing by Ira Iosebashvili and Nick Zieminski)

By Saqib Iqbal Ahmed and April Joyner


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
APHRIA INC. 3.37% 8.29 Delayed Quote.22.27%
AURORA CANNABIS INC. 0.54% 9.39 Delayed Quote.-71.95%
AUXLY CANNABIS GROUP INC. 1.41% 0.36 Delayed Quote.-33.33%
CANOPY GROWTH CORPORATION 4.16% 32.3 Delayed Quote.18.27%
CRONOS GROUP INC. 1.48% 9.58 Delayed Quote.-3.91%
DJ INDUSTRIAL 1.12% 29591.27 Delayed Quote.2.54%
HEXO CORP. 0.00% 0.95 Delayed Quote.-54.11%
INVESCO LTD. 3.88% 16.33 Delayed Quote.-9.18%
LIBERTY HEALTH SCIENCES INC. -2.20% 0.445 Delayed Quote.-27.05%
NASDAQ 100 0.00% 11905.941438 Delayed Quote.36.34%
NASDAQ COMP. 0.22% 11880.633754 Delayed Quote.32.12%
ORGANIGRAM HOLDINGS INC. -1.37% 1.44 Delayed Quote.-54.86%
S&P 500 0.56% 3577.59 Delayed Quote.10.73%
THE GREEN ORGANIC DUTCHMAN HOLDINGS LTD. 0.00% 0.26 Delayed Quote.-65.33%
THE SUPREME CANNABIS COMPANY, INC. 3.57% 0.145 Delayed Quote.-76.98%
TILRAY, INC. -9.24% 6.68 Delayed Quote.-61.00%
UBS GROUP AG 1.99% 13.18 Delayed Quote.8.75%
All news about S&P 500
04:16aGlobal stocks rise as investors cheer Biden transition, vaccine progress
RE
03:02aWALL STREET STOCK EXCHANGE : BlackRock ups U.S. stocks to overweight, bullish on..
RE
02:53aGermany's DAX to expand to 40 members from 30 in index shake-up
RE
11/23Biden to name Yellen to Treasury to lead U.S. from sharp economic downturn
RE
11/23Stocks shoot up as vaccine progress, Biden transition boost confidence
RE
11/23Stocks rally on vaccine news, Yellen speculation
RE
11/23Cyclical gains lift stocks, Yellen news gives brief boost
RE
11/23Dow Rises on Covid-19 Vaccine Results
DJ
11/23INSTANT VIEW : Biden to name Janet Yellen as Treasury secretary - Democratic all..
RE
11/23Dow Rises on Covid-19 Vaccine Results
DJ
More news
Chart S&P 500
Duration : Period :
S&P 500 Technical Analysis Chart | SP500 | US78378X1072 | MarketScreener
Technical analysis trends S&P 500
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Top / Flop S&P 500
OCCIDENTAL PETROLEUM CORPORATION 15.76 Delayed Quote.16.83%
APACHE CORPORATION 12.86 Delayed Quote.12.41%
DIAMONDBACK ENERGY, INC. 44.49 Delayed Quote.11.67%
EOG RESOURCES, INC. 50.38 Delayed Quote.10.99%
VALERO ENERGY 56.09 Delayed Quote.10.37%
WEST PHARMACEUTICAL SERVICES, INC. 275.72 Delayed Quote.-3.16%
CATALENT, INC. 99.8 Delayed Quote.-3.42%
STERIS PLC 189.09 Delayed Quote.-3.55%
MARKETAXESS HOLDINGS INC. 519.91 Delayed Quote.-4.80%
NEWMONT CORPORATION 58.68 Delayed Quote.-4.82%
Heatmap :