Dow Jones Higher on Biden Power Shift, Janet Yellen for Treasury Secretary
Stock market rallies during Monday trading with Dow Jones leading the pack. DJIA is trading 300 points up amid post-election saga.
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- The stock market reacts well to positive news
- The presidential transitory period set to commence
US stock market rallied Monday on the announcement that the Trump government has approved the transition process to the Biden administration. Additionally, the move higher was aided by rumors that President-elect Biden has selected Janet Yellen for the role of Treasury Secretary.
The Dow Jones Industrial Average closed the Monday session higher with over 300 points, or more than 1.00%, while the S&P 500 was up about 20 points, or a bit over 0.50% and the Nasdaq Composite closed slightly over 25 points or 0.20%.
Led by financial stocks, the equity market kicked off the Thanksgiving week by posting solid gains as traders and investors feel optimistic about the Covid-19 vaccine. AstraZeneca, the third company to develop a vaccine against the coronavirus, stated that its analysis shows an efficacy rate of 70%, which lags behind the vaccines by Pfizer-BioNTech and Moderna, who promise a success rate of over 90%.
A New Chapter in America’s Political History
The Presidential post-election saga seems to be coming to an end as Trump’s administration acknowledged President-elect Joe Biden as the winner of the election and is now in the process of commencing the transition procedure. The catalyst for the move was Biden’s certified victory in Michigan, which was a sign that the President’s efforts to overturn the election results were falling short. President Trump has not yet conceded, but he took to Twitter to express his support for the anticipated transition start. In his tweet, President Trump stated that he had told officials to begin the work on “initial protocols”. A few hours later, however, Mr. Trump argued that the procedure was simply “preliminary work with the Dems”, and it will not stand in his way to prove that the election was corrupt. He concluded the tweet by saying that he “will never concede to fake ballots & Dominion”.
However, the decision by Emily W. Murphy, the Administrator of the General Services Administration, to designate Mr. Biden as the winner, clears the way for the incoming administration to coordinate the transition with officials of the current government.
President-elect Joe Biden will now move ahead with his cabinet plans. Making headlines yesterday was the unconfirmed news that Janet Yellen, the former Fed chair, is poised to become Treasury Secretary. If the Senate confirms the nomination, Janet Yellen will be the first woman to lead the Treasury Department. As a former Federal Reserve chair, she is a highly respected economist who is expected to put her efforts into fixing the economy pragmatically and sustainably. Being at the helm of the Treasury will doubtlessly require a specific set of skills since the Treasury and the Fed engage in different forms of policies. Indeed, the Federal Reserve focuses on monetary policy as an independent agency, while the Treasury deals with fiscal policy. Both, however, are focused on issues of a regulatory nature, and both are concerned with the current economic conditions.
The markets cheered the rumored nomination as Janet Yellen is seen as the person to combine different skill sets in her efforts to consolidate the economy during these challenging times. It has to be stated that
as a Treasury Secretary, Janet Yellen will have less autonomy to lead the narrative in the way that she did at the Federal Reserve.
Markets are poised for a higher open on Tuesday as futures contracts on DJIA point north by over 200 points, followed by the S&P 500 futures and the Nasdaq futures also showing a higher open in the pre-market hours.
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