New iPhone drives Wall Street surge for tech

NEW YORK: Anticipation over the launch of the new iPhone drove US tech stocks higher on Monday, capping a mostly buoyant day in global markets.

Sentiment was also boosted by rising confidence the US will avoid a post-election challenge and see a decisive winner in the Nov 3 presidential vote, along with ongoing expectations that Congress will pass a new stimulus package.

Expectations around the new iPhone line-up sent Apple soaring more than 6.4%, and the tech-rich Nasdaq Composite Index finished the day up 2.6% overall.

Analysts expect Apple to introduce a selection of iPhone 12 models in multiple sizes tailored for the super-fast 5G telecom networks taking root worldwide, with strong demand for the model anticipated in China.

Europe’s top markets ended mostly higher after a healthy session in most of Asia, however London faltered as additional coronavirus restrictions for specific areas in northern England were unveiled.

The latest manoeuvrings by the White House on fiscal stimulus suggests significant difficulty in reaching an agreement before the election, but investors are becoming more confident of a larger deal down the road.

Roller-coaster ride

Art Hogan, chief market strategist at National Securities, said former vice-president Joe Biden’s widening lead in the polls means a contested election has become less likely, allowing Democrats to retake the White House from President Donald Trump and potentially win control of the Senate.

“That narrative has shifted and Wall Street seems to be warming to a blue wave,” Hogan said, adding that investors now anticipate a larger stimulus package after the election.

Hopes for a fresh injection of cash into the world’s top economy have overshadowed a surge in virus infections that has forced some governments to reimpose containment measures and targeted lockdowns.

Investors were sent on a roller-coaster ride last week when Trump first called off stimulus talks before doing a U-turn and saying they were back on and progressing well.

On Friday, Trump increased his offer, proposing a US$1.8 trillion package and saying he favoured an even larger deal, but Democratic leaders called the offer “insufficient” and Senate Republicans are opposed.

Even so, “The narrative coming out of Washington on the next stimulus package is 100% ‘when and how much’, not ‘if'”, said a note from DataTrek Research.

Oil slides

Meanwhile in Asia, Hong Kong and Shanghai led markets higher, both piling on more than 2% with support also coming from expectations President Xi Jinping will use a speech in Shenzhen later this week to announce a further opening up of China’s economy.

But oil prices slumped on the prospect of further lockdowns in many nations.

“More lockdowns around the globe could also hit economic growth, and oil prices have been weakening today as a result of this,” said Chris Beauchamp, chief market analyst at online trading firm IG.