The Post-Debate Silence In The Stock Market

"Donald Trump took the oath of office at" (CC BY 2.0) by quapan

The first presidential debate was certainly interesting, but it has done little to remove the investors’ worries. The stock market gave a mixed reaction to the debate. China saw some share hikes while investors were trying to understand the debate between sitting president Donald Trump and the Democratic opponent Joe Biden.

The S&P 500 index lost 0.5%. Hong Kong and Shanghai made some gains. The reason the stock market is so uncertain and unpredictable is that the number of COVID-19 cases in the United States has been on the rise again, and investors want to remain cautious. Worldwide, the total number of cases has surpassed 1 million, triggering a massive loss of jobs in the market.

What is the outcome of the debate?

Global Index

Although China took a heavy hit due to the pandemic, a survey done on Chinese manufacturers shows positive results. The economic activity in the country is regaining its speed since September as businesses recover, which could be attributed to the change in focus in the stock market towards Chinese businesses. The Caixin manufacturing PMI fell to 53.0 from 53.1 in last August. However, the official manufacturing PMI of China has risen from 51.0 to 51.5.

This is the highest this index has gone in the last two years. The demands in overseas countries have again started to boost up. Suppliers and businesses are starting to recover and keep up with the changing pace of the market.

There were some moderate losses before the debate on Tuesday, and it was predicted that the debate could highly impact the market. However, after the debate, there is no big shift that investors are seeing. This forces many experts to conclude that the faceoff between two challengers of the United States president position has not impacted the stock market.

Overall, the global economy had a mixed return today. Whereas Thailand and Indonesia saw share values dropping, Singapore and Taiwan saw it increasing. Some of the biggest losses on Wall Street came from energy companies, banks, and stocks that are based on the spending habits of consumers.

Impact on oil price

The price of oil also fell by almost 3.2%, which is the reason the energy sector is suffering as well. The crude oil price in the US fell almost $0.20 per barrel in the trading exchange.

No end in sight

The pandemic still has a hold over the market performance. It is affecting the economic outcome and causing the S&P 500 index to fall. Currently, the value of the index is at the lowest ever since March of this year, when the market had the biggest plunge of the year as the news of the pandemic started spreading.

Mark Hackett, chief of investment research nationwide, had stated that businesses need the economy to open up as soon as possible for the market to recover. The companies are equipped to handle a bumpy ride and tackle the economic changes currently, but if there is another shutdown, then they might not recover.

Will there be a new stimulus package?

Congress is still split on whether there will be a new stimulus package, and what will be the size of it. The previous unemployment benefits of $1200 have expired long back, and House Speaker Nancy Pelosi is meeting with Steve Mnuchin, Treasury Secretary, to come to an agreement that will start the second round of stimulus discussion, if at all.

Considering the Supreme Court Justice’s recent death, Ruth Bader Ginsburg has also thrown massive uncertainty on who the next Supreme Court nominee will be.

People are looking at the major jobs report, which will be out on Friday before the election. This is an indicator that will be crucial for the Democratic and Republican nominees to determine which way the people are voting.

According to some economists, almost 850,000 jobs were added to the economy ever since September, and the unemployment rate stands at 8.2%. Unemployment and unemployment benefit are major factors of this election that could decide who ends up being elected as the US president.