A mob stormed the US. Capitol on Wednesday, but investors showed little reaction – they lifted the Dow Jones Industrial Average to record levels and showed little appetite for traditional safe-haven assets, despite violent scenes that temporarily disrupted ratification of President-elect Joe Biden’s victory / p>

That’s because the Capitol invasion didn’t change expectations of the near-term political and economic outlook

Instead, the driving force behind the stock market gains and other financial market moves appeared to be optimism about the prospect of another, larger round of relief spending after Georgia held two runoff elections while giving the party control of the Senate while the session was in motion President-elect Joe Biden took office on Jan. Prepared January 20 The Democrats retained control of the House 3 elections in November

“Regardless of the political ramifications of today’s Capitol takeover, Wall Street will continue to benefit from the economic opportunities of a democratic trifecta,” CFRA chief investment strategist Sam Stovall told MarketWatch in a post-market email on Wednesday

Investors continued to be optimistic about the potential for vaccines to roll out to allow for a wider economic reopening, despite the lack of spread and concerns about the faster spread of COVID-19 due to new variants

While stocks were making gains, they ended the session significantly higher than the Dow Jones industrial average
DJIA,
098%
rose 43,780 points, or 14%, to a record of 30829 to close40 after exceeding 31000 threshold for the first time The S&P 500
SPX,
152%
advanced 06% close at 374814, just 02% off its all-time high on the Nasdaq Composite
COMP,
235%
lost ground to end the day with a loss of 0.6%

More like a haven in times of turmoil and uncertainty, treasuries instead saw a fall in prices that boosted returns on the 10-year rate of return
TMUBMUSD10Y,
1087%
rose 86 basis points to 1041% and above 1% for the first time in nine months

The US. Even the dollar, which tends to find support in times of chaos, was largely unaffected by the ICE U.S. Dollar index
DXY,
035%,
A measure of the currency versus a basket of six major competitors was barely changed near 8941

However, it was surprising to see how little the market reacted overall, said Edward Moya, senior market analyst at Oanda

“The financial markets knew President Trump would not go quietly, but they did not expect it,” Moya told MarketWatch in an email

Congress should resume the certification process on Wednesday evening, a key element for the peaceful transfer of power

“In the end, the events at the Capitol will not change the election result and will likely add to the importance the Democrats had in pulling the ‘blue wave’ through,” he said, referring to the turn of the White House and both chambers of the Congress

Meanwhile, investors see “significant consequences” for US. Politics and business as a result of a unified government, said Kathy Lien, chief executive of FX strategy at BK Asset Management, in a note

“President-elect Joe Biden will be able to impose more aggressive stimulus packages and finance spending with higher taxes,” Lien said, noting that Sen. Chuck Schumer, who will be the majority leader, has the passing of 2$ 000 stimulus checks viewed as a top priority for lawmakers

In the meantime, investors are downplaying concerns about possible tax hikes as they focus on the prospect of immediate incentives, she said

In a press release on Wednesday, Stovall underscored the market-positive factors associated with a unified government He denied the widespread belief that market participants prefer a divided government

He noted that all eight Democratic presidents since 1900 have been accompanied by a Democratically controlled House and Senate, and that the stock market outperformed six out of eight in the first year of such democratic trifectas for an average profit of 113%

Democrats aim to take pole position in Washington after major Senate races in Georgia have turned their backs on Republicans and results are already flowing through the financial markets

William Watts is MarketWatch’s lead market author, based in New York. Watts writes on stocks, bonds, currencies and commodities, including oil. He also writes on global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, DC.

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Source: https://www.marketwatch.com/story/why-stocks-and-financial-markets-shrugged-as-a-violent-mob-stormed-the-capitol-11609972407