Wall Street heads for lower open as post-election day rally fizzles out

Wall Street is expected to begin Friday’s session in the red as the initial burst of positivity following election day appears to be fizzling out as the result remains too close to call. Spread-betters are expecting the Dow Jones Industrial Average to open around 233 points lower, while the S&P 500 is forecast to drop 33 points and the Nasdaq is predicted to fall 135 points. The old market adage of ‘buy the rumor, sell the fact’ is perfectly applied this week, says market analyst Craig Erlam at Oanda. “Undeterred by the prospect of long-drawn out legal challenges and recounts, stock markets rallied strongly from the word ‘go’ this week, ignoring the noise and instead rejoicing in an election result that delivers stability and no major overhauls as far as policy is concerned.” Indeed, as it stands, Joe Biden is close to achieving the necessary electoral college votes to defeat an incumbent president for only the fifth time in the last hundred years, though counts are still ongoing and Trump’s team have filed lawsuits in at least five states. “I’m pleased to say though that what I’ve seen is general disgust at what Trump is trying to do,” said analyst Marshall Gittler at BDSwiss. “Even such Trump allies as Fox News and the Murdoch-owned NY Daily Post are pointing out that there is no evidence of fraud whatsoever. Most of the suits have been laughed out of court. The Michigan Attorney General’s office described Trump’s request as an ‘attempt to unring a bell’.” US stocks are also being sold but not heavily, as a split Congress is going to make it very difficult for a potential Biden administration to deliver as big an economic stimulus, as well as his more ambitious policies, though many of which were widely viewed as market negative. Markets are viewing a smaller potential stimulus as “a small price to pay for stability”, said Erlam. Though Gittler says the ‘mauve’ result will see Republicans probably block Biden’s plans for tax hikes and more regulation Democrats will also have to nominate more centrist people for the Cabinet than they might wish, meaning a boost for drug companies, health insurers, and tech companies. Four things to watch for on Friday: Once again the election results are likely to dominate, with final results expected from Georgia, Nevada, Pennsylvania, North Carolina, Arizona and Alaska. Biden currently holds leads in Georgia, Nevada and Arizona, two of which will secure his victory in the electoral college Macro data is also in focus will the all-important non-farm payrolls for October. Forecasts are predicting the US economy will have added around 510,000 jobs in the month, down from 661,000 in September. Also holding attention will be the US unemployment rate, which is predicted to have fallen to 7.7% in October from 7.9% the previous month, although it is still highly elevated In the earnings calendar, investors can expect quarterly figures from pharmacy group CVS Health Corp (NYSE:CVS) and hotel chain Marriott International Inc (NASDAQ:MAR)