US stocks rallied on Wednesday the day after election day, despite the news that there was no resolution for the Presidency. The divided government helped buoy the overall markets. Stocks gained traction following news that the Senate would likely remain in Republican control, which would mean that many of the stocks that were depressed because of this scenario rallied. Sectors in the S&P 500 index were mixed, led higher by Healthcare, and technology while materials bucked the trend. The materials sector had rallied ahead of the election as investors believed that a huge infrastructure bill would be in the cards of the democrats controlled the Senate. US yields moved lower following a softer than expected US private payroll report and a weak ISM services. Oil prices moved higher following a larger than expected draw in crude oil inventories.
US Private Payrolls Rise more than Expected
The US ADP Private payrolls rose at a smaller rate than expected in October. According to ADP private payrolls increased by 365,000 jobs last month below the 600,000 expected. The rebound was the smallest increase since July. The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, which is expected to be released on Friday. However, the upwardly revised 753,000 in September was higher than the Labor Department’s count of 661,000, whereas the previous month. Services accounted for almost all the job growth, with 348,000. The hospitality industry, which took the biggest hit during the virus-related shutdown, added 125,000 jobs.
Services PMI Declines
The ISM Services PMI moved lower to 56.6 in October versus 57.5 expected. Further details of the publication revealed that the New Orders Index fell to 58.8 from 61.5, the Employment Index declined to 50.1 from 51.8 and the Prices Paid Index rose to 63.9 from 59.