Market never lies.
With a potential Democrat majority raising the prospect of further stimulus, the U.S. 10-year Treasury yield
TMUBMUSD10Y climbed above 1% for the first time since March, while the dollar fell. Bond yields across Europe
TMBMKDE-10Y TMBMKGB-10Y TMBMKIT-10Y also moved higher.
“It will not be easy to force through all of the more socialist agenda, but the market sees this result as broadly more pro-cyclical and likely to lead to a higher-yield environment. This means Nasdaq futures are lower, as tech stocks have been the biggest beneficiaries of the low-rate world, while Russell 200 futures moved higher overnight. S&P 500 futures were lower with the tech sector weighing heavily,” said Markets.com analyst Neil Wilson. “This may be the moment for a ‘healthy’ correction in the U.S. market,” he added.