• Instagram
  • Facebook
  • Twitter
  • Pinterest
  • LinkedIn


CHAOS in Washington’s Capitol has led towards a certain impact on the market. Whether it’s forex or gold, the market has condemned y=the act of disregard. As a result, the bullish trend saw a little dip.

Let’s check all the key facts from the day and see what was the reaction of the market?

It was flabbergasting. A rampaging mob in the halls of Congress wasn’t enough to stop the American stock market. The market was roaring gains, even as the rioters — incited by the president of the United States — stormed the Capitol and asked the members of Congress to flee and vacate the space.

Further, the rally was continued and Congress resumed the counting of the electoral vote and declared Joseph R. Biden Jr. as the nation’s 46th president. And the party was still going on Friday, despite a Labor Department report showing that employers cut 140,000 jobs in December, the first drop since the spring and an ominous sign for the overall economy

This is considered as the worst stretch as per the analysis reports tallied by the economic indicators after the coronavirus death cases in the United States.

Yet after a year in which the S&P 500 rose more than 16 percent — despite a calamitous drop in March — the stock market has managed to post improbable gains.

Now the valid question arises that what led to the stock market’s splendid disregard for so many dismal, even apocalyptic, events?

The rally simply reflects the greed of bullish investors and has led to the following analysis of the current situation:

  1. Interest rates are extraordinarily low. Although the yield on 10-year Treasury notes has risen lately, the Federal Reserve and other central banks have said they are determined to keep short-term rates low, and when rates are low, stocks and other risky assets are comparatively attractive.

  2. The pandemic is the main cause of global economic troubles and it will eventually end. With vaccinations underway, Wall Street hopes that economic growth in most regions and sectors will surge later this year, along with rising corporate profits.

  3. The chances of at least some further economic stimulus have increased. By sweeping the two contested Senate seats in Georgia, Democrats have gained a tenuous hold on both houses of Congress as well as the presidency. President-elect Biden will very likely be able to deliver more aid to people in need and to local governments, which is expected to increase economic growth.

  4. Truly sweeping legislative changes will be difficult, if not impossible, given the Democratic Party’s razor-thin margin in the Senate and the reduced majority in the House. While some increased spending is likely, this shaky grip on power implies that big tax increases on wealthy investors and rich corporations may not happen soon.

  5. The election may have delivered something close to a Goldilocks alignment for the stock market. Mr. Biden’s cabinet picks so far suggest that he will govern as a centrist, and the market historically has fared well under Democratic presidents who do not have sweeping control of Congress. The possibility that the Biden administration will usher in a more efficient and inclusive government, with more spending and only moderate changes otherwise, is seen as a sweet outcome for stocks.

All this analysis gives us a conclusion that the halls of Congress are not impregnable. It may not be obvious right now, but the stock market is at least as vulnerable.

Time to start trading?

403, API World Tower, Trade Center 1,

Sheikh Zayed Road,

Dubai, United Arab Emirates-47425

+971 4 3333 294

Legal : Seven Capitals is incorporated as an International Business Company with registration number 53261 IBC 2020. The objects of the Company are all subject matters not forbidden by International Business Companies (Amendment and Consolidation) Act in particular but not exclusively all commercial, financial, lending, borrowing, trading, service activities and the participation in other enterprises as well as to provide brokerage, training and managed account services in currencies, commodities, indexes, CFDs and leveraged financial instruments.

Risk Warning: Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives, and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the Seven Capitals brand based on the legal requirements in his/her country of residence. Please read Seven Capitals full Risk Disclosure.

Regional restrictions: Seven Capitals brand does not provide services to residents of the USA, Japan, British Columbia, Quebec, and FATF blacklisted countries.

  • Instagram
  • Facebook
  • Twitter
  • Pinterest
  • LinkedIn

Copyright © 2020 Seven Capitals. All rights reserved