Written by Norman Isaac Mwambazi

Stock market updates: Stock futures drop ahead of Georgia runoff elections

Voting for the Georgia run-off elections, which are expected to decide who controls the US Senate stops today, Tuesday, January …

Voting for the Georgia run-off elections, which are expected to decide who controls the US Senate stops today, Tuesday, January 5, 2021, and it has already affected the stock futures.

Yesterday evening, stock futures ticked down as investors awaited results from this long-awaited election in conjunction with the worsening COVID-19 trends in the U.S. and abroad.

The Dow Jones Industrial Average fell 1.25% during the regular trading session, making this the index’s worst start to a year since 2016.

Most investors assume that Republicans will maintain control of the as they have been doing during the Trump administration and they base this assumption on the party’s historical tendency to win Senate seats in Georgia.

However, recent polls have shown that both Democratic candidates, filmmaker Jon Ossoff, 33, and Rev Raphael Warnock, 51 hold a razor-thin lead against the Republicans.

As it stands, Republicans have 50 seats in the Senate, two more than the Democrats who have 48. This means that if the Democrats win both seats in Georgia in the run-off elections, the blue party will a majority in the Senate since Vice President-elect Kamala Harris would be able to cast tie-breaking votes.

A Democrat-controlled Congress would help President-elect Joe Biden implement most of his campaign promises, some of which include raising corporate taxes and minimum wages. Biden also promised to reforms the education sector, housing, and climate change, which he said in a tweet, “On day one, my administration will re-join the Paris Agreement and put America back in the business of leading the world on climate change.”

These changes, including a larger stimulus package, could boost and affect various pockets of the markets in the near-term might transpire.

John Stoltzfus, a strategist at Oppenheimer, an American multinational independent investment bank and financial services company said in a note Monday that he believed a Democratic win in Georgia could spark a 10% decline in the benchmark S&P 500 from year-end closing prices.

COVID-19 concerns

Although the US kicked off the vaccination process of their population last month after the development of the Pfizer vaccine, there are increasing concerns about the deadly disease. The pandemic has ravaged the U.S. more than any other country on the globe with nearly 21 million people infected and over 354,000 dead.

According to data from the New York Times, on average, more than 210,000 new cases are reported daily across the country over the past seven days.

There have been delays in vaccinating people in the U.S., with only 4.5 million doses administered by the time of this writing.

However, Dr Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases (NIAID), said that they will be able to administer 1 million vaccinations per day in the coming few months.

In the U.K., the coronavirus mutated into a new variant that is more contagious than the novel COVID-19. To contain the spread of this new strain, Prime Minister Boris Johnson ordered the whole country to return to a third lockdown until mid-February and promised to relax the restrictions if the vaccination helps bring down the infections and deaths.

The new variant has been confirmed in other countries, with the US confirming cases in the states of New York, California, Colorado, and Florida.

Here is how the markets moved as of 6:13 p.m. ET Monday:

  • S&P 500 futures (ES=F): 3,690.5, down 1.75 points or 0.05%
  • Dow futures (YM=F): 30,081.00, down 23 points or 0.04%
  • Nasdaq futures (NQ=F): 12,637.50, down 12 points or 0.09%