{"id":107376,"date":"2021-01-06T03:06:28","date_gmt":"2021-01-06T03:06:28","guid":{"rendered":"https:\/\/precoinnews.com\/?p=107376"},"modified":"2021-01-06T03:06:28","modified_gmt":"2021-01-06T03:06:28","slug":"stocks-fall-bond-yields-rise-as-investors-brace-for-possible-democrat-triumph-in-georgia","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/stocks-fall-bond-yields-rise-as-investors-brace-for-possible-democrat-triumph-in-georgia\/","title":{"rendered":"Stocks fall, bond yields rise as investors brace for possible Democrat triumph in Georgia"},"content":{"rendered":"
TOKYO\/NEW YORK (Reuters) -Global stock prices slipped and U.S. bond yields rose on Wednesday as investors braced for the prospect that Democrats could win both races in a U.S. Senate run-off election in Georgia, handing them control of the crucial chamber.<\/p> Along with their narrow majority in the House of Representatives, a \u2018blue sweep\u2019 of Congress could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.<\/p>\n Democrat candidates took early leads in the twin Georgia Senate races, though the outcome may remain in doubt for days if the margins are razor-thin.<\/p>\n \u201cHaving control over both the legislative and executive branches could theoretically lead to sweeping changes to policy,\u201d said Vasu Menon, investment strategy executive director at OCBC Bank.<\/p>\n \u201cWith Biden proposing to reverse President Donald Trump\u2019s tax cut, increase the minimum wage, and strengthen oversight on various industries, some might argue that his agenda is not particularly market-friendly.\u201d<\/p>\n Futures for the S&P 500 fell 0.43%, while Nasdaq futures shed 0.7% on fears Democrats could pursue tighter regulations on big tech firms.<\/p>\n Other industries, such as banks, oil and gas and healthcare, could come under heavier scrutiny, while infrastructure and alternative energy sectors could benefit.<\/p>\n Japan\u2019s Nikkei fell 0.4% while MSCI\u2019s index of Asian-Pacific excluding Japan erased earlier gains to stand almost flat.<\/p>\n The 10-year U.S. Treasuries yield rose to as high as 0.987%, the highest level since March, on expectations of larger government borrowing.<\/p>\n \u201cA market pullback seems both reasonable and healthy. But stocks won\u2019t plunge to zero because there is a countervailing positive here,\u201d said Phil Orlando, Chief Equity Market Strategist, Federated Hermes of a potential Democratic sweep.<\/p>\n \u201cA Biden honeymoon with Democratic Congress helmed by Nancy Pelosi and Charles Schumer would likely lead to more fiscal stimulus and infrastructure spending. That would serve as a temporary sugar high for stocks in 2021 before the bill comes due in 2022.\u201d<\/p>\n Adding to broader uncertainty in markets was the latest twist in a regulatory saga over whether the New York Stock Exchange would delist three Chinese telecom giants on security grounds.<\/p>\n Shanghai stocks extended gains on Wednesday, with the CSI300 index rising 0.5% to reach its best levels since 2008.<\/p>\n Oil prices held firm, maintaining their gains of nearly 5% made on Tuesday after Saudi Arabia offered to make voluntary cuts to its oil output.<\/p>\n Tensions following OPEC member Iran\u2019s seizure of a South Korean vessel also frayed nerves, adding further support to the market.<\/p>\n Tehran denied on Tuesday it was using the ship and its crew as hostages, a day after it seized the tanker in the Gulf while pressing a demand for Seoul to release $7 billion in funds frozen under U.S. sanctions.<\/p>\n U.S. crude futures were almost flat at $49.95 a barrel after having climbed 4.9% on Tuesday.<\/p>\n International benchmark Brent crude futures stood firm at $53.45 after a gain of 4.9% on Tuesday.<\/p>\n In currencies, the U.S. dollar hit a new low before bouncing back on the prospects of the \u2018blue sweep\u2019 in Georgia.<\/p>\n The euro rose to as high as $1.2328, a high last seen in April 2018, while the yen hit a 10-month high of 102.595 to the dollar.<\/p>\n Spot gold held firm at $1,948.20 an ounce, having touched a two-month high earlier in the day.<\/p>\n Bitcoin traded at $33,904, near record high of $34,800 set on Sunday.<\/p>\n