Biden’s Effect on the Markets
President-elect Joe Biden won the presidential race, according to the Associated Press. He is the first president since George W. Bush to enter the house without power over the house or senate.
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Finance
Domestic Manufacturing
The coronavirus pandemic has debilitated the US economy in many different aspects. From the stock market to the unemployment rate, no one can deny that this virus has hit every sector of the American economy.
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Goldman Sachs Pleads Guilty to 1MDB Scandal and Pays $2.9B Fine
Last Thursday, Goldman Sachs Group, Inc. agreed to pay a $2.9B fine to regulators for raising funds for 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund tied to multiple cases of fraud and corruption. Dubbed as “one of the biggest financial scams in history,” the United States Department of Justice (DOJ) has led one of the world’s largest investment firms to plead guilty after further investigations ensued.
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Elections and the Markets
When it comes to predicting future performance, the only data available to investors is the past; and that is what investors will look to when trying to decipher the direction of the stock market after November’s election.
Read MoreUnemployment Benefits Impacting the Stock Market
Since the start of the pandemic, about thirty million Americans have become unemployed. This is a record high for the country, leaving many Americans relying on weekly stimulus checks to pay bills in order to pay for basic necessities.
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Department of Justice’s Antitrust Lawsuit Against Google
The Department of Justice filed an antitrust lawsuit against Google on October 20. The DOJ is suing Google due to its business practices, arguing that Google acts as a monopoly.
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Solid Week in the Markets
The S&P 500, Dow Jones Industrial Average, and Nasdaq all had a week to remember with their largest gain in the last three months. Powering the weekly surge were new talks about a stimulus deal, analysts’ growing optimism about EPS, and the Vice President Biden’s increasing lead in the polls.
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The Rise of ESG Investing; Blackrock Capitalizes
Blackrock, the world’s largest asset manager, has launched an Environmental, Social, and Governance fund. ESG criteria have become popular among socially conscious investors looking to back companies that share their values, whether its sustainability, reinvesting back into local communities, or leadership that practices good faith. Younger investors, in particular, have made this screening method popular.
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Chains vs. Local Restaurants
McDonald’s, Chipotle, and Dominos have done great during the pandemic while local restaurants have been struggling. Well capitalized food chains like Chipotle and Dominos have gained customers and added stores, while many local restaurants have had to shut their doors.
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IP-O-verload
Initial Public Offerings (IPOs) have been sizzling as of late. This strong demand for new stocks is illuminated with the debut of cloud companies such as Snowflake and JFrog. Experts say the Federal Reserve’s decision to hold interest rates at zero for the foreseeable future has ignited the demand for IPOs while accelerating the overall stock market and, in particular, high growth techs. Troy Hooper, head of IPO content at Mergermarket, stated, “IPOs are doing well and I guess that’s what happens when you have the Fed pumping money into the financial system. The money has to go somewhere.”
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