Amid a welcome development for U.S.-listed Chinese telecom stocks, the three broader-market indexes ended the day in positive territory as all eyes remain on the Georgia Senate runoffs that should provide investors much-needed clarity on the political landscape for the next two years.
Adding back some of their Monday losses, the Dow Jones industrial average and S&P 500 ended the day up 170 points, or 0.6%, and 0.7%, respectively, while the tech-heavy Nasdaq gained nearly 1%.
Energy stocks, buoyed in recent weeks by vaccine optimism and the prospects of a split Congress, led gains in the S&P Tuesday, with Occidental Petroleum, Apache and Marathon Oil all up close t0 10% as oil prices rallied thanks to an agreement among producers.
Shares of China Mobile, China Telecom and China Unicom shot up 9%, 5% and 12%, respectivelyâ€“recouping most of their past week’s lossesâ€“after the New York Stock Exchange said it was dropping plans to delist the Chinese telecom firms pursuant to an executive order from President Donald Trump; Treasury Secretary Steven Mnuchin reportedly objected to the change of mind.Â
Fragrance maker Coty said Tuesday morning it has completed its acquisition of a 20% stake in Kim Kardashian Westâ€™s business for $200 million; its shares jumped 2% but are still down nearly 40% over the past year.Â
In a note to clients Tuesday morning, Bank of America strategist Savita Subramanian reiterated the firm’s expectations that value-oriented firms in cyclical sectors like financials and energy will lead growth in 2021 and warned that as the bull market rages on, she sees near-term risk skewed to the downside.Â
Global markets were similarly tepid, with Japanâ€™s Nikkei 225 closing the day down 0.4%, while the United Kingdomâ€™s FTSE 100 ticked up 0.6% and Germanyâ€™s DAX Index shed 0.6%.
“There was some positive momentum coming from Asia and Europe Tuesday morning, but that quickly petered out on Wall Street. Last year ended on such a high that I wonder whether weâ€™re just seeing some profit-taking in an uncomfortable period for the global economy,” says Craig Erlam, a senior market analyst at Oanda, noting that Covid is once again forcing countries to impose harsher restrictions (including the U.K., on Monday night) and that massive uncertainty remains over the Senate runoff elections. If Democrats pull off an unexpected two victories, investors are expecting heightened regulation and higher taxes for corporations.Â
What To Watch For
At best, results for the Senate runoffs should be known by late Tuesday night or early Wednesday, says Adam Crisafulli, the founder of Vital Knowledge Media. “The knee-jerk reaction to a [Democrat]-led Senate is net negative for equitiesâ€”as was witnessed Monday.”
Before its Tuesday agreement, leading intergovernmental oil cartel OPEC-plus was once again split over whether or not to increase crude oil output, with Russia favoring an increase while Saudi Arabia leads efforts to hold off on an increase for at least another month. Many in the cartel worry increasing production too soon could create a supply glut that tanks prices, as happened earlier in the pandemic.
Tesla shares closed at an all-time high Tuesday and have surged in the two weeks since their addition to the S&P 500; theyâ€™re up 12% since December 21.Â