Posts

Increase in Stock Market

Global Tech And Health Stock Markets Climbing As Biden Gets Closer To Presidency

As Joe Biden gets closer to becoming the next President of the United States, shares in major technology and health stocks are climbing. Shares in Asia Pacific, for example, have already climbed to their highest point in three years within the past 24 hours. 

Biden currently only needs six electoral college votes to secure the presidency. Investors on the other side of the world have been closely monitoring and betting on Biden getting to 270 votes. Asia Pacific shares climbed by 1.3% which is the highest it has increased since February 2018. Japan technology firm Nikkei rose by 1.1%, the highest it’s been in nearly a year. 

Embed from Getty Images

China’s blue chips stocks gained .8% due to the possibility of Biden taking Trump’s place in the White House and therefore reversing his trade war tariffs as well. Edward Moya is a spokesperson for OANDA who recently spoke with the press about how even the possibility of a Biden presidency is helping boost the global stock market. 

“The contest is not over, and President Trump will not go down without a fight, but financial markets are confident to price in a Biden presidency along with a Republican controlled Senate.”

A Biden win with a Republican controlled Senate would mean there’s less risk for regulation and corporate/personal taxes being raised. The stock market’s reaction to the past 48 hours also is showing “US growth stocks outperforming on prospects of less economic aid,” according to market analysts. 

“Technology and healthcare stocks duly led the charge higher overnight while those leveraged to consumer demand lagged. With tech stocks accounting for such a large share of the indices, the S&P 500 gained 2.20% and the Nasdaq 3.85%.”

Embed from Getty Images

Bond markets in the US are running under the assumption that a divided government would reduce the possibility of debt-funded spending on things like stimulus and infrastructure support for the country. If this were to happen there would also be a reduced bond supply as well. 

10-year US Treasury has dropped down .74% so far after remaining at a .93% peak for five months. Additionally, “the Dow jumped 1.3%, or some 360 points, while the S&P opened up 1.6%. The Nasdaq rallied 1.9%. The S&P 500 and the Nasdaq Composite are on track for their best week since April. For the Dow, it’s shaping up to be the best week since June,” according to media reports

Shares in major tech companies have also continuously risen within the past two days. For example Facebook and Google parent company Alphabet traded more than 2% higher while Amazon, Apple, and Microsoft gained more than 3% each. Because these tech companies work with international governments, mainly China, the prospect of a divided US government has investors on all sides assuming taxes won’t increase. This would also mean the current trade war with China would stabilize. 

As the results continue to be counted throughout the country, and Biden gets closer and closer to a presidency, stocks will likely continue to increase in the tech and healthcare sectors, as those are two areas that will likely see a massive spike in investments should Biden win and enact his policies for Covid-19 and the current economy in the US.

U.S. Stocks Climbing Despite Uncertainty Surrounding Presidential Election

Tech-led stocks in the US began climbing when the market opened up on Wednesday morning, despite there being a lack of clarity in terms of who will win the 2020 presidential election. 

According to reports, The Dow Jones Industrial Average increased by 500 points, or 1.7%. The S&P 500 traded 2.3% higher while the tech-heavy Nasdaq Composite increased by 3.2%. Mike Lewis is the managing director of US equity cash trading at Barclays, and spoke with the press this morning about these surges. 

“I think that the outlook going forward for markets is this is going to be more about policy and the Fed than it’s going to be about politics, which is a good thing for markets.”

Embed from Getty Images

Key swing states like Wisconsin and Pennsylvania could take a while to fully determine how the votes will lean. Both candidates and their camps are confident in their paths to victory this week.

Amazon, Microsoft and Apple all saw spikes of at least 3% in their stocks while Facebook increased by 7%, and Google-parent company Alphabet jumped more than 5%. Traders on Wall Street attribute these spikes to a multitude of factors. The possibility that Republicans will maintain control of the Senate is a positive for the groups, as a Democrat congress could have weighed down on the high-growth sector, according to Barry Bannister, Stifel Head of Institutional Equity Strategy.

“It appears investors may be satisfied with at least half a Republican Senate and no tax increase, knowing they have a ‘Fed put’ if fiscal assistance is slower in coming. This favors Growth stocks over Value near-term.”

Embed from Getty Images

Traders are also still grappling with the idea of a contested election, as Wall Street strategists claim that could have major consequences for the stock market. “News of a contested election could cause a sharp drop in stocks in the very short term, but we do not see it as a bearish gamechanger,” Tom Essaye, founder of the Sevens Report, said.

Traders are also watching the Senate race closely as the result of that race will have major implications on the future of the market as a whole. A Democrat win in the Senate and a Biden presidency has a lot of traders worried about the higher tax rates that would impact technology shares especially. 

On the other hand, some traders think a blue wave in the Senate and White House could lead to a larger stimulus package for Americans as we continue to battle the coronavirus pandemic; which would also boost stocks linked to the larger economy. 

“When this is all said and done, I still believe equities will move higher regardless of who wins the Oval Office. The coronavirus pandemic and U.S. monetary policy will be bigger market drivers over the long haul,” said Ryan Nauman, market strategist at Informa Financial intelligence.

Real Estate Investing

The Pros and Cons of Investing in Real Estate

Investments are a smart way to expand your wealth, as the returns on long-term investments can be substantial. However, when considering how to invest your money, it’s important to take into account various options. While investing in the stock market is common and relatively safe, it may be a better choice in some cases to invest in real estate instead. Buying land as an investment is fundamentally different from investing in stocks, and as such, before you make a decision, it’s best to consider how these differences are likely to impact your returns.

According to Andres Pira, the CEO of Blue Horizons Developments, there are many advantages to investing in real estate. When buying property instead of stocks, you have more control over your profits. Investing in the stock market requires buying stocks when they are low and selling them when they are high, and it can be difficult or sometimes impossible to predict how the stock market will behave. Real estate, on the other hand, is more fixed, as variables like size, location, and features remain in the buyer’s control. Additionally, when selling real estate, you have the power to negotiate your price depending on who you’re selling to, which you cannot do with stocks.

Embed from Getty Images

Another advantage of real estate investments is found in their consistency. If you’re a landlord, you can expect a consistent cash flow in the form of regular monthly payments from your tenants. Generally, as time goes on, the cost of rent increases to match inflation, meaning that if you’re a landlord, you can expect monthly payments to increase with time. While the stock market offers the potential for an unexpectedly high payout, it carries with it a risk of losing a substantial amount of money, given the difficulty of predicting economic changes.

Investing in real estate is also unique in the sense that it enables certain tax advantages. For instance, real estate owners can take advantage of a depreciation expense, which allows them to save money on their taxes significantly and use those savings to reinvest, pay back loans, and more. Real estate can be a tricky market to invest in, however, and investors need to be careful about the property they choose to buy by putting substantial time and effort into research and other due diligence.

There are also a number of disadvantages to real estate investments. For one, property is very expensive; while you can invest in the stock market with a relatively small amount of money and still expect moderate returns on your investment in due time, properties that are worth investing in require a substantial down payment and other upfront costs such as improvements and repairs, as well as ongoing payments like property taxes, insurance, and more. 

Embed from Getty Images

And while investing in the stock market can be as easy as signing up for an app, real estate investments take a substantial amount of your time, particularly if you’re new to the business, as there is a lot to learn when managing real estate investments, during which time mistakes can be very costly.

If you want to invest in real estate, you can be expected to be in it for the long haul, as the best way to invest in real estate involves taking advantage of a long-term strategy for maximizing profits. And while being a landlord seems to be an easy way to generate passive income, tenants can cause any number of problems, and sometimes even sue their landlords over disagreements about their living situation. To make matters worse, the law in many jurisdictions tends to favor tenants over landlords, as a tenant’s right to a suitable living environment is weighted against a landlord’s right to make money off their investment. For these reasons and more, it is essential to exercise good judgment and care when expanding your investment portfolio to include real estate, but managing properties successfully can be very profitable.