With Biden declared the winner, what are the prospects for investors

APAC

Reuters staff

(Reuters) – With Democrat Joe Biden screened on Saturday by major TV networks as the winner of the US presidential election, many investors welcomed the news as positive for markets but warned of continued volatility.

Republican President Donald Trump, who has made repeated allegations of election fraud without providing evidence, immediately accused Biden of “rushing to pretend to be the winner.”

Here’s what the investors have said that they will focus on next:

* The Senate. All eyes are now on the two ballots scheduled in Georgia in January, which will determine who controls the upper house of Congress. Investors are evaluating the impact it will have on a Biden administration’s ability to push through stimulus, regulatory changes and possible tax increases.

* Trump’s reaction. While investors are becoming less worried about the huge swings in US stocks, some have expressed concern about what Trump might do during the lame duck session ahead of the grand opening. Unpredictable moves could insert volatility in the markets, they said.

* Stimulus and the Fed. Focus will now shift to Biden’s ability to secure a deal on fiscal stimulus and how much more the Federal Reserve can do to support the coronavirus-hit economy. With the potential prospect of a Republican Senate, expectations of an easy victory of big stimuli have been nullified. What happens will also have implications for Treasuries.

* Currencies. An increasingly bearish picture is unfolding for the US dollar, which has experienced its worst week since March on signs that Fed money printing instead of government spending could be used to support the economy.

* Technological actions. High-tech stocks are set to benefit from a potential traffic jam as it reduces the chance that investors will sell such stocks due to concerns about capital gains tax increases. However, these stocks may see some tax-fueled sell-off before Georgia outflows. Other stocks benefiting from a Biden win: solar, cannabis and infrastructure.

* Biden’s cabinet. Investors are now looking ahead to Biden’s government choices to assess whether it will rule as a business-friendly moderate or push for progressive legislation that could weigh on sectors like financials and oil but support clean energy.