While the race to dominate the Senate still hangs in the balance – there’s likely to be a re-election for the Senate to come in Georgia – investors are also expecting Republicans to take over the presidency. Such an outcome would allow for more modest policies on taxes and regulations.
“This is what happens in a Senate race that could determine the next move up or down,” said CMC Markets’ chief market analyst, Michael Hewson. If this sounds like it might change on the January run-off, you might see Some weakness in certain parts of the stock market in the event the Democrats get their craving for the blue wave. “
Outside the US, markets will be looking for signs that the Biden administration will take a more diplomatic approach to international trade negotiations than President Donald Trump, according to Margaret Yang, a strategist at DailyFX.
“A new chapter in the foreign policy of the United States … important to the world and of particular importance to export-oriented economies, specifically China, Mexico” [European Union] Japan, “Yang wrote in a note on Monday.
“What we need in the US now is someone who can really control the outbreak of the Coronavirus. Investors are confident that Biden gives them this guarantee,” said Naeem Aslam, chief market analyst at AvaTrade.
Despite Biden’s victory, investors remain concerned about how Trump will respond to losing the election in the coming weeks.
“The only variable that cannot be explained is that President Trump will become more disruptive and destabilizing over the next 10 weeks,” said Brad Karp, Chairman of Paul, Weiss, Rifkind and Wharton & Garrison LLP. “There is nothing he can try to do and there is no ability to predict how the markets might react.