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- Stock markets have largely encouraged the prospect of a Biden administration and a split government, but some corners have moved on as other corners continue.
- Tax increases and the absence of new rules helped boost tech, financial and healthcare stocks during the chaotic week.
- But speculators on energy stocks or the US dollar do not lose market advantage.
- Visit the Business Insider homepage for more stories.
Last week, the prospect of Biden becoming president was quickly heated by stock markets. And like any big event some areas were won while some faced new challenges.
President-elect Joe Biden emerged as a potential winner Friday morning after updated vote counts in Pennsylvania and Georgia, in which he showed that the president left President Donald Trump behind on the battlefield. Although Trump has not yet conceded defeat, the decision desk headquarters called a race in favor of Biden on Friday, and administration officials have indicated that Power will be transferred peacefully.
The stock market, on the other hand, began preparing for the result on Wednesday in anticipation of a split government. While a Biden president can achieve more peaceful trade relations and the prospect of more economic stimulus, the potential for Republican-controlled Senate blockade of tax increases and stricter regulation.
Shares slowed their role in the weeks following the post-election rally. Strategists will now step back and assess how the weekend elections will affect risk markets and the economy in the coming years.
Here are the winners and losers of Election Week.
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Winners
Probably the biggest stock-market winners were tech stocks, for how much they had to lose.
Markets in the sector gained on Wednesday and Thursday as investors saw the potentially split Congress as a protection against antitrust regulation. The S&P 500 tech index rose 10% during the week, furthering the bullish story and cementing the elevated valuation of tech giants ahead.
Financial and healthcare stocks were similarly undermined by intense government scrutiny. The S&P 500 Healthcare Index surged more than 8% during the week as investors believe the government-divided government will fail to make progressive health-insurance reforms.
The corresponding index in financial stocks has returned about 6% in the hope that Senate Republicans can stop the rise in corporate taxes.
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In state elections, marijuana was the clear winner. New Jersey, Montana, South Dakota and Arizona legalized recreational use of marijuana, rapidly expanding the addressable market for fast-growing producers. Pot stocks continued to rally during the week after Biden’s victory, as Democrats indicated they plan to decriminalize the drug at the federal level.
While such a policy will take longer to implement, it points to a brighter future for the youth industry.
During the week, Rora Cannabis rose 201 percent, while allies including Tiller, Afria and Canopy Growth also rallied. The Horizons Marijuana Life Science Index exchange-traded fund, which tracks a basket of pot stocks, rose 36%.
Riderser Giants Lift and Uber also rose after the election results came out on Tuesday. Both companies fought hard to pass Prop.22 in California, which continues to classify jig-economy companies as their workers as independent contractors and avoid providing benefits that come with full employment. . Uber jumped 36% during the week, close to a record high. The lift increased by 41%.
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Lost
With the election results coming in, the stock market traded flat in energy markets and lagged far behind in the boom. The Republican-controlled Senate will probably shut down B-Biden’s most progressive green-energy policies backed by the president. Despite initially raising residue-fuel stocks on Wednesday, they soon turned a profit.
After rising nearly 4% on Tuesday, the S&P 500 energy release index plunged and closed at the same level as it had earlier in the week.
Meanwhile, the US dollar fell to its lowest level since March as investors turned to the Federal Reserve for the country’s economic recovery. Democrats and Republicans remain world apart from their respective motivational proposals, giving the country a boom without financial support after August. The economy is unlikely to bounce back quickly, and inflation expectations will be pushed further into the future. The Fed has indicated that it will not raise interest rates unless inflation continues to hover above 2%. The value of the dollar weakens as long as the near-zero rates are in place.
In addition, the Fed may need to ease further monetary conditions to keep track of recovery. Such efforts will add cash to the financial system and further weaken the value of the dollar. To be sure, a weaker dollar lowers the cost of imports, and President Trump has repeatedly called for a weaker dollar to improve the country’s competitiveness in trade.
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Eventually, as election news dominated the media landscape throughout the week, the release of economic data driving in the markets in general was ignored. Shares rose on Wednesday despite an ADP job report, a sign of a sharp slowdown in rental activity during October.
And while the Bureau of Labor Statistics’ monthly nonfarm payrolls report has surpassed economics estimates by hand, stocks are still down in Friday’s trading. According to labor-market figures published throughout the week, observers of the situation have undoubtedly missed out on market gains and are on the verge of collapse.
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