The choice: We are eight days out of election day in the United States. Investors have priced a win for Joe Biden, with predictive markets setting the odds of a 63% victory for the former vice president.
But some on Wall Street warn that markets are not perfect crystal balls. “It’s not over until it’s over,” warned Nicholas Colas, co-founder of DataTrek Research, in a recent note.
Investors now expect a new economic stimulus deal to be pushed through shortly after the election. But it will largely depend on the outcome. If Trump enters a lame period of change, it could be difficult to make a deal before a transfer of power takes place next year.
The United States hit a record seven-day average of new Covid-19 cases last week, registering more than 83,000 new infections both Friday and Saturday. Experts will know in early December whether a potential coronavirus vaccine is safe and effective, but there is unlikely to be widespread availability until later next year, said Dr. Anthony Fauci, the largest American expert in infectious diseases, Sunday.
In Europe, the situation is escalating rapidly. Italy will impose a curfew on bars and restaurants at 18 Monday, after cases rose by more than 21,200 on Sunday, a new daily high since the start of the pandemic.
“The second wave of the virus and new restrictive measures risk reversing the recovery of the eurozone,” ING economists told clients on Monday.
If they easily beat Wall Street’s expectations, as they have done in the past, equities could rocket and support the wider market.
Keep an eye on this space: Push and pull of these factors causes investors to support turbulence. VIX, a measure of the S&P 500’s volatility, rose nearly 8% on Monday to its highest level since early September.
Meet the woman who could head the U.S. Treasury Department under Biden
Analysts from Washington to Wall Street say a leading candidate would be Lael Brainard, a central bank governor with years of practical experience for the job.
Brainard, who could replace Steven Mnuchin, would be the first woman to serve in the role. Despite some concerns from market watchdogs that she may impose stricter rules on large banks that can provide stocks, she is nowhere near as progressive as Senator Elizabeth Warren, another rumored challenger.
“There could be a tug-of-war between progressive and more moderate Democrats, but many people prefer someone with both a deep background in economics and monetary policy,” said Quincy Krosby, chief market strategist at Prudential Financial.
Her resume: Brainard’s career includes stints at McKinsey and The Brookings Institution. She also served in various economic roles in the Clinton and Obama administration.
“In terms of pure experience, Brainard has beaten all the tickets,” Robert Kuttner, co-founder of The American Prospect, a left-leaning nonprofit publication, said in a report last month. “It would be hard to imagine a more ordinary background.”
Kuttner believes Brainard’s appointment could appease both Biden’s Wall Street allies and progressives, who would likely oppose tapping someone currently working in finance.
Nothing is set: A spokesman for the Biden transition team told CNN Business that they “do not make any staff decisions before the election.” Other names mentioned as potential candidates include former Fed Chairman Janet Yellen and former Fed Governor Sarah Bloom Raskin as well as Mellody Hobson, co-CEO of CFO Ariel Investments.
Do you want to make a technical bet? Check the footprint of the cloud
Many of the world’s top technology companies have reaped great benefits from the shift to teleworking this year, which has increased the demand for their cloud services.
For those who have been slower in prioritizing cloud computing, however, it has been a different story.
The company, which manufactures software for business operations, promised to speed up the transition to the cloud. This would allow it to rely less on sales of software licenses, a business unit that saw revenue in the last quarter.
But the transition eats up profits for years. The company has written off its medium-term guidance and rattled off investors who are not sure the new strategy will pay off.
Big picture: SAP competitor Salesforce has seen shares rocket 54% this year thanks to the popularity of its cloud offering. If SAP can get it right, there is plenty of money to be made. Meanwhile, the company’s editions are a reminder that technology is not a one-way effort – and that cloud footprint these days means a lot.
Coming later: Ant Group is due to price shares prior to its debut in the market. It could mark the largest IPO recorded.