Fed remains on low interest rate: Investors bet on "business as usual" after the US election

The rally on Wall Street continues. In doing so, investors are betting that there will be no radical political change in direction in the USA after the presidential election. The US Federal Reserve is sticking to its ultra-loose monetary policy. Meanwhile, the shares of a chip manufacturer are going through the roof.

In the hope of a continuation of the economic status quo in the USA, more investors are stocking up on stocks. "The markets prefer a divided government," said investment strategist Brian Levitt of asset manager Invesco. This dampens concerns about tax hikes, major investments in renewable energies or changes to health insurance. Therefore, the US Standard Values ​​Index rose Dow Jones this Thursday by 2.0 percent to 28,390 points. The technology-heavy one Nasdaq advanced 2.6 percent to 11,890 points and the broad one S&P 500 gained 1.9 percent to 3510 points.

Joe Biden, the challenger to US President Donald Trump, is only a few votes left on the electoral body for entry into the White House. However, his Democrats failed to achieve their goal of gaining a majority in the Senate as well as in the House of Representatives. This means that stricter regulation of the economy is off the table, said portfolio manager Justin Onuekwusi from asset manager Legal & General. "That's a huge positive and outweighs the likelihood of a smaller stimulus package." Dwindling fear of cartel investigations helped large technology groups such as Amazon or Apple to gain up to 3.6 percent.

Fed as a savior in an emergency

In the midst of the hanging game over the outcome of the election, the central bank prepared Fed the ground for new ones Economic aid. It left the key interest rate in the range of zero to 0.25 percent and at the same time kept the door open for new emergency aid in the corona pandemic. Fed chairman Jerome Powell said the monetary watchdogs analyzed and broadly discussed their multi-billion dollar bond program at the meeting. They are determined, if necessary, with "powerful instruments" like these to support the economy, which has been hard hit by the crisis. The duration, scope and composition of the purchase program can be adjusted if necessary.

This prospect hit the world's reserve currency again. The Dollar index, which reflects the exchange rate against major currencies, fell 0.9 percent. At the same time, investors coincided gold one that rose 2.4 percent to $ 1948 a troy ounce (31.1 grams). The precious metal often serves as a hedge against inflation.

Stockbrokers do not rule out unrest

However, some stockbrokers warned against relying on a smooth transfer of power in view of the tight US election result. Trump would cling doggedly to power, predicted Naeem Aslam, chief market analyst at brokerage firm AvaTrade. "We are on the verge of civil war and it is only a matter of time before Trump opens the gates for it." Both Trump and Biden supporters took to the streets in several U.S. cities, some with guns. At the same time, Trump got his lawyers in position to stop the ongoing count in some states or to enforce a recount.

Qualcomm at record high – GM in the fast lane

On the US stock market, the papers shot up Qualcomm by a good twelve percent after the chip manufacturer had promised sales above market expectations for the current quarter. The company is one of the beneficiaries of the changeover to the new 5G mobile communications standard, which requires new mobile phones to be used, wrote analysts from the asset manager Canaccord Genuity.

The titles of General Motors (GM), which were 5.4 percent more expensive. Thanks to the rapid sales of profitable pickups and SUVs, the automaker made a surprisingly high quarterly profit. The profit margin of 15 percent is impressive, praised analyst Philippe Houchois from the investment bank Jefferies.