May 16, 2021

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Biden leaves his mark on the market in the first 100 days

New York: The first 100 days of US President Joe Biden taking office have left their mark on financial markets, as stocks extended gains last year, the dollar stagnated and bond yields rose.

The S&P 500 is on track to rise 10% during Biden’s first 100 days, surpassing the gains in the same time period of any president in the past four decades.

After counting the benchmark stock index’s advance from Election Day to Biden’s 100th day in office, the index rose nearly 25%, marking “the largest post-election stock gain of any incoming president in at least 75 years,” according to analysts at JP Morgan.

Of course, the market has been on a strong upward path since its decline in March in the wake of the Coronavirus, with the S&P rising 90% from its 2020 lows on a combination of massive stimulus from the Federal Reserve and US lawmakers and with the help of that. Strong interest from local retail investors.

However, many market watchers believe that at least some of the market gains this year are attributed to the $ 1.9 trillion (RM7.8 trillion) stimulus Biden has already pushed, in addition to the proposed $ 2.3 trillion infrastructure plan.

While stocks rose due to growing investor appetite for risk, the dollar weakened as a safe haven. The dollar is on course for a 0.1% gain against a basket of six major currencies, the smallest change ever in the first 100 days of any president over the past four decades.

Interest rates were close to zero in the US and the Fed’s assurances to maintain a accommodative stance as long as the recovery of the US economy took a heavy load of the dollar.

The dollar received some support from the sharp rise in Treasury yields during the first quarter, prompting speculative investors to reduce bearish bets on the greenback.

However, this movement in earnings was halted in the second quarter, leaving the greenback to tumble again.

Expectations of a stronger “green energy” push under the Biden administration prompted investors to pour money into stocks in the alternative energy sector.

One of the strongest sectors during the first 100 days of Biden was connectivity services, which include Facebook and Google’s parent alphabet, despite calls from lawmakers for more regulation.

The vast majority of S&P 500 components have risen since Jan.20, while the healthcare sector has the most shares still in negative territory since Biden opened. Reuters