Over the last four years, Wall Street has demonstrated a truly remarkable capacity to shake off whatever crimes and horrors are unfolding outside of its boardrooms and trading floors, up to and including a global pandemic that’s killed 2 million people and shuttered every developed economy in the world. So, you know, what’s a little armed invasion of the U.S. Capitol in service of a petty tyrant to overthrow the very stability and system of government that business leaders (many of them with no small amount of fealty to said tyrant, however transactional) insist are the very things that undergird American capitalism and prosperity? A sprinkling of gunfire and blood in the halls of Congress? The first failure of a peaceful transition of power in the world’s largest economy? Well, not much, it turns out.
On Wednesday, the Dow Jones Industrial Average rose 1.44% and the S&P 500 gained 0.57%.... Wall Street had given up early gains on Wednesday after supporters of President Donald Trump stormed the legislative building, disrupting the congressional vote to certify the 2020 presidential election results.
How decorous. Anyway, now that all of that irrelevant exhibitionism is over and done with, let’s take a look at another aspect of the belief that, really, stocks can only go up, no matter what happens, specifically with regard to the imminent prospect of complete Democratic control of the levers of government after the New York Stock Exchange’s step mom and her day- (if not also insider-) trading buddy were turfed out of Washington by the people of Georgia. You know, the “blue sweep” that analysts and experts first insisted was absolutely necessary to the well-being of the U.S. economy, before deciding that actually divided government was probably the best solution?
Supporting sentiment were Democratic wins in two closely watched U.S. Senate runoff elections in the state of Georgia on Wednesday, which swung the balance of power in President elect Joe Biden’s favor. Despite earlier worries about the economic risks of a “blue sweep”, expectations for a large fiscal stimulus package in early 2021 are now pushing markets higher.
Indeed, all’s forgiven and forgotten, at least wherever securities are traded, except for, you know, the really important stuff like the Institute for Supply Management’s nonmanufacturing or services sector survey of activity rising 130 basis points.
U.S. stock benchmarks surged Thursday morning, with gains accelerating and pushing indexes to a series of milestones, after a report on service sector activity was better than expected…. On Wednesday, the Dow and small-capitalization Russell 2000 ended at record highs but off their best levels of the day as equity markets pared gains somewhat amid the chaos in Washington.
It was the least they could do. Literally.
Stocks higher as Washington chaos fails to dislodge recovery bets [Reuters]
Dow surges above 31,000, S&P hits record after hotter-than-expected economic report [MarketWatch]
What About the Enablers? [DealBook]