How Biden’s Victory Affect the Markets

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All eyes have been on America and now that the presidential election winner has been named, what can traders expect next? In this post, we will explore all the investment opportunities that may blossom from Biden’s election win.

Signs have been clear when the global stocks rallied sharply on Monday, 9th Nov. Coupled with the good news of Pfizer’s vaccine efficiency, the majority of the market has propelled even higher.

What Experts Think

Studying all possible political scenarios all the way back to 1945, this may be the “best-case scenario” for stock investors, according to David Henry, investment manager at U.K. firm Quilter Cheviot. Overall, a split Congress resulted in the best average annual returns for the U.S. stock market, about 14% in dollar terms. Additionally, a split Congress can also lead to the introduction of a larger economic stimulus package, public spending, tax or health reform, and climate related-legislation.

HSBC Global Private Banking’s chief market strategist, Willem Sels says, “Technology and healthcare stocks were likely to benefit, as markets have feared more regulation in these sectors.” HSBC continues to feel optimistic about technology themes like online consumption, automation, 5G, and biotech.

Gold, Oil & Bitcoin

A split Congress is expected to boost gold in a similar way it would benefit growth stocks as high inflation and rates are unlikely. Most gold bulls still expect to see it climb further as the pandemic will rage into 2021. Nevertheless, much depends on government stimulus, debt, and geopolitical tension.

On the other hand, since the oil meltdown in April, it’s been on slippery ground. Fortunately, it recovered fast and rose up in response to the Biden victory, however, analysts feel this could be short-lived due to the persistent pandemic. Till the availability of a successful vaccine is confirmed, global growth is likely to remain suppressed.

In the Bitcoin corner, the price has shot up to over 40% in the past month alone. A supply shortage, geopolitical uncertainty, and civil unrest are said to bolster the expectation that Bitcoin will keep rocketing to $100K-$288K before the end of December 2021.

References:

https://edition.cnn.com/2020/11/10/investing/joe-biden-stocks-sectors/index.html
https://www.valuethemarkets.com/2020/11/09/what-a-joe-biden-victory-could-mean-for-global-financial-markets-gold-oil-and-bitcoin/
https://www.cnbc.com/2020/11/10/investment-opportunities-after-joe-bidens-election-win.html
https://www.marketwatch.com/story/heres-what-a-biden-presidency-spells-for-stocks-bonds-and-commodities-11604768420