IRS plans to extend tax filing deadline to May 17
Investors are eagerly awaiting statements from the next US administration after Democrats gained control of Congress on Wednesday, which could strengthen President-elect Joe Biden’s stance on policies such as spending hikes and tax hikes..
Reports of attacks on the US Capitol briefly shook markets, but investors said the impact would be temporary at best..
After four years of a low tax regime that helped prop stocks, some investors were worried that the Democratic-controlled Congress could lead to policies that open the way for tax hikes and other potentially market-unfriendly policies that could put serious pressure on it..
On Wednesday, these concerns did not appear in any way, as both the Dow and S&The P 500 hit record highs. The aftermath of Georgia’s run-off election has put pressure on tech stocks, causing investors to turn their gaze to other underperforming sectors such as banks and small-caps in the past year..
Market participants generally assume that the Democratic-controlled Senate will increase the chances of new incentives and infrastructure spending, a result, along with the rollout of COVID-19 vaccines, is seen as positive for companies whose businesses have been hit hard by the coronavirus due to lockdowns and restrictions. on trips.
Bond yields rallied as the dollar hit its lowest level in nearly three years before rebounding later in the session..
Growth bets helped spur significant gains in infrastructure, energy and other sectors, which were among the biggest losers in 2020..
At the same time, concerns about increased regulation by Democrats and a sharp rise in Treasury bond yields to over 1% have hurt big tech stocks, which boosted markets last year..
«What happened last night changed the rules of the game», – said Phil orlando (Phil Orlando), Chief Equity Strategist at Federated Hermes. «Scenario «Blue wave» back in force».
Democratic control of the Senate would give Joe biden more room for action on his agenda, which includes new incentives and infrastructure spending, although a tough Senate split could make it harder to push high spending.
It could also pave the way for higher corporate taxes and stricter regulations, which Wall Street generally discourages. Tech giants, which may face increased legal oversight, have not participated in the widespread market growth, resulting in the S&P 500 up 0.6%.
The Russell 2000 Index, which tracks U.S. small-cap companies, rallied as small-cap stocks are generally considered the first to recover when the U.S. economy emerges from recession..