With Democrat Joe Biden projected as the winner of the US presidential election by major television networks on Saturday, many investors welcomed the news as good for markets but warned of continued volatility.
Republican President Donald Trump, who has made repeated claims of voter fraud without providing evidence, immediately accused Biden of “rushing to falsely pose as the winner.”
Here’s what investors said they’ll focus on next:
* The Senate. All eyes are now on two elections expected in Georgia in January that will determine who controls the upper house of Congress. Investors are weighing the impact it will have on the Biden administration’s ability to push through stimulus, regulatory changes and any tax increases.
* Trump’s reaction. While investors are less and less concerned about the huge swings in US stocks, some expressed concern about what Trump might do during the lame duck session before the inauguration. The unpredictable movements could introduce volatility into the markets, they said.
* Stimulus and the Fed. Attention will now turn to Biden’s ability to achieve agreed 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 with a lot of stimulus have receded. What happens there will also have implications for Treasuries.
* Foreign exchange. An increasingly bearish picture is developing for the US dollar, which has suffered its worst week since March on signs that the Fed’s money printing rather than government spending may be deployed to boost the economy.
* Technological actions. High-flying tech stocks will benefit from a potential stagnation as it reduces the possibility of investors selling those stocks over concerns about capital gains tax increases. Still, these stocks could see some tax-driven sales before Georgia runoff. Other stocks that benefit from a Biden win: solar, cannabis, and infrastructure.
* Biden Cabinet. Investors are now looking to Biden’s cabinet elections to assess whether he will rule as a business-friendly moderate or promote progressive legislation that could weigh on sectors like finance and oil, but bolster clean energy.
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