Politics will be front and center as a catalyst in the first week of the new year - CNBC | Canada News Media
Connect with us

Politics

Politics will be front and center as a catalyst in the first week of the new year – CNBC

Published

 on


Traders work on the floor of the New York Stock Exchange.
NYSE

Stocks exit 2020 with strong gains and are riding a tailwind, but already in the dawn of the new year, the market could face its first big challenge.

The final outcome of the 2020 election plays out Tuesday, when voters in Georgia will pick their senators and decide which party controls the U.S. Senate.

With President-elect Joe Biden heading to the White House and a Democratic-controlled House of Representatives, Wall Street has been comfortable with the view that Biden and the Democrats could not succeed with tax hikes and more progressive policy changes while Republicans hold the Senate.

The runoff election for the two Senate seats Tuesday is widely expected to result in one or both of the incumbent Republican senators retaining their seats. But Democrats are close in the polls and should they win, each party would have 50 seats with Vice President-elect Kamala Harris the tie breaker.

“Georgia is the most important thing to the Biden presidency for the next two years,” said Ed Mills, Washington policy analyst at Raymond James. “It’s going to determine what is the legislative agenda and who can get confirmed by the United States Senate.”

Sen. David Perdue is being challenged by Democrat Jon Ossoff, while GOP Sen. Kelly Loeffler is running against Democrat Raphael Warnock. None of the candidates had more than 50% of the vote in the Nov. 3 election, so Georgia law requires a runoff election between the two leading candidates for each seat.

“It’s a binary event,” said Mills, adding it’s of growing interest to markets. “The general sense for the market is that Republicans are well positioned to maintain their majority in the Senate. But I think the 2020 election as well as the 2016 election and to some extent, the 2018 election has humbled us … The Senate outcomes, in particular, seem to be less predictable than almost any other elections.”

Mills said the results may take several days to determine, adding to the uncertainty the event could hold for markets. According to an RBC investor survey, 88% expect Republicans to maintain control, and most say that is a positive for the stock market.

“The market tends to shoot first and ask questions later. There will certainly be a reaction if Democrats win both those seats,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. Strategists say there could be a relief rally if Republican incumbents see a clear victory.

“That totally dominates [trading] because it’s about do we have status quo or do we have Democrats controlling all parts of Washington and what that means for spending and taxes,” Boockvar said. “I think you could see the worries about taxes overwhelming any thoughts on the benefits of more spending” by Democrats.

By the numbers

A year of extreme volatility ended with a big win for stocks, as the pandemic steered the course for markets. The S&P 500 was up 16.3% for the year, ending at 3,756. That gain comes after a 34% decline early in the year, followed by a powerful more-than 65% rebound. Technology was the big winner for the year, and the Nasdaq was up 43.6% at 12,888.

Besides the runoff vote, the market will be watching a stream of data in the coming week, including the important December jobs report Friday. That could show fewer than 100,000 jobs were added as the spreading virus impacted hiring and layoffs. There were 245,000 jobs created in November.

There is also ISM manufacturing data Tuesday, and a number of Fed speakers, including Vice Chairman Richard Clarida on Friday.

The virus itself could also be a factor for stocks.

Conventional wisdom for the coming year has been that vaccines will be widely distributed, and by the second half things will start to get back to normal and the economy will pick up. But the initial distribution has been slow, and far short of the 20 million targeted for December by President Donald Trump’s task force.

In that recent RBC survey, three quarters of investors were optimistic about vaccine distribution with 80% expecting a majority to be vaccinated by the end of 2021. “We suspect that the positive outlook for the stock market and the economy would deteriorate if expectations for a smooth vaccine rollout are not met,” RBC strategists wrote.

They also noted that nearly 60% of the investors surveyed believe high stock market valuations are problematic.

“This suggests to us that any threat to the economic and earnings recovery story could spark profit-taking. On this point, it is worth noting that the vaccine was the No. 1 issue keeping investors up at night, closely followed by monetary policy and excessive optimism on the recovery,” the strategists noted.

Chris Rupkey, chief financial economist at MUFG Union Bank, said investors will also be watching the formal acceptance of the Electoral College vote Wednesday. Strategists expect the vote count to confirm Biden’s presidency.

However, Missouri Sen. Josh Hawley says he will challenge the certification, and several House Republicans have already vowed to contest the election at that time. If one House member and a senator jointly object to a state’s slate of electors, the two houses of Congress must separately debate and vote on the objection.

Strategists see little chance of any impact on the election outcome, but there could be fireworks. Trump has been claiming since the election that there was fraud but multiple courts failed to find any truth to the claims.

Rupkey said investors are not taking into account enough potential for political risk from the deep animosity between the two political parties.

“I think the additional stimulus and hopes for additional stimulus, and infrastructure spending in 2021, I don’t know that that is such a slam dunk, because of the issue of political instability,” he said.

Week ahead calendar

Monday

9:45 a.m. Manufacturing PMI

10:00 a.m. Construction spending

10:00 a.m. Chicago Fed President Charles Evans

12:15 p.m. Cleveland Fed President Loretta Mester

6:00 p.m. Cleveland Fed’s Mester

Tuesday

Vehicle sales

10:00 a.m. ISM manufacturing

3:45 p.m. New York Fed President John Williams

3:45 p.m. Chicago Fed’s Evans

Wednesday

8:15 a.m. ADP payroll data

9:45 a.m. Services PMI

10:00 a.m. Factory orders

2:00 p.m. Fed minutes

Thursday

8:30 a.m. Initial jobless claims

8:30 a.m. International trade

9:00 a.m. Philadelphia Fed President Patrick Harker

10:00 a.m. ISM nonmanufacturing

11:00 a.m. St. Louis Fed President James Bullard

1:00 p.m. Chicago Fed’s Evans

3:00 p.m. San Francisco Fed President Mary Daly

Friday

8:30 a.m. Employment report

10:00 a.m. Wholesale trade

11:00 a.m. Fed Vice Chairman Richard Clarida

3:00 p.m. Consumer credit

Let’s block ads! (Why?)



Source link

Continue Reading

Politics

‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

Published

 on

 

HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

Published

 on

 

REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Nova Scotia election: Liberals say province’s immigration levels are too high

Published

 on

 

HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

Source link

Continue Reading

Trending

Exit mobile version