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Instant View: With Pennsylvania and Georgia, Biden on doorstep of White House

(Reuters) - Wall Street shares back-pedalled on Friday, while the U.S. dollar pared losses after Democrat Joe Biden pulled ahead of President Donald Trump in two battleground states that could put him in the White House.

FILE PHOTO: Democratic U.S. presidential nominee Joe Biden is accompanied by vice presidential nominee Kamala Harris as he makes a statement on the 2020 U.S. presidential election results during a brief appearance before reporters in Wilmington, Delaware, U.S., November 5, 2020. REUTERS/Kevin Lamarque

Biden took the lead in Pennsylvania and Georgia for the first time on Friday, three days after polls closed, according to Edison Research. With a 253 to 214 lead in the Electoral College vote that determines the winner, according to most major television networks, Pennsylvania’s 20 plus Georgia’s 16 electoral votes would put the former vice president over the 270 he needs for victory.

MARKETS

* STOCKS: Dow down 0.3%, S&P 500 down 0.23%, Nasdaq down 0.6%

* BONDS: Yield on the 10-year note rose to 0.8303%

* FOREX: The dollar index was off 0.31%

* VIX: The VIX was off 3.9% at 26.55

COMMENTS

SUBADRA RAJAPPA, HEAD OF U.S. RATES STRATEGY, SOCIETE GENERALE, NEW YORK

“Yields were higher even before (the news on Biden’s leads.) “The payroll print was stellar, unemployment declined and there was decent job creation.

“We still don’t have clarity on the Senate elections. It’s not that markets are starting to price in a blue wave. The market perhaps is starting to cheer there being some certainty to the election. There was some skittishness to the bond market when elections were too close to call. So the risk premium associated with a prolonged election uncertainty gets priced out.”

YOUSEF ABBASI, GLOBAL MARKET STRATEGIST, STONEX GROUP INC, NEW YORK

“There is some concern with regards to if Biden creeps ahead or wins Georgia then there is chance that those (Senate) seats will follow. That’s what people are reading into this. They’re saying, ‘OK, if there is this kind of momentum for Democrats, maybe the Senate (control) isn’t over yet.’ There’s a little bit of hesitation.

“If you do get that Democratic Senate you realize that tax rates could be moving higher. Now granted, it’s going to be difficult to see the timing of when that would happen. You really don’t think a Biden administration during the middle of a pandemic, in the middle of attempting to help the economy recover, is going to raise tax rates immediately.”

KEN POLCARI, MANAGING PARTNER, KACE CAPITAL ADVISORS, JUPITER, FLORIDA

“Biden now takes Pennsylvania, even if it is by one vote the fact is he flipped it. Clearly, number one, it is getting more definitive, it is going to be difficult to challenge. Although (Trump) will challenge it, it is getting more definitive in terms of a Biden win. Now you have that whole issue about Georgia all of a sudden being thrown into the mix, about the possibility of losing both GOP senators and flipping the Senate which was not something the market was prepared. The whole Georgia senate race changes the complexion of the conversation because the country is now accepting the fact that Trump lost to Joe Biden. Whether or not you want to complain that it was stolen or not, the fact is he won.”

“Now the focus is shifting from the president to Georgia and the Senate because that is really going to define what happens next. Even if Biden gets in with a GOP Senate that would have been the checks and balances. But if Biden gets in and the Senate flips, then we are back to the sweep.”

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FLORIDA

“I think that was expected. (Biden) was on the path to winning yesterday. Markets have been pretty comfortable with that idea, but if it’s contested, it adds a little bit of uncertainty.”

“Even with these states being really close, we might have to go back and recount. So we’re in for a long period of uncertainty.”

JUSTIN HOOGENDOORN, HEAD OF FIXED INCOME STRATEGY, PIPER SANDLER, CHICAGO

“The probability of a Democratic (White House) victory was already high. In some sense the elimination of the uncertainty is pushing up yields.”

“Also a rising possibility of the Democrats being able to push more significant legislation through in the Senate. It may not be likely , but even if they capture one Senate seat, it just becomes more plausible to push some legislation through. The closer they are to that, the more plausible.”

Compiled by the Global Finance & Markets Breaking News team

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