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If the US Democratic Party wins a majority in the Senate, it will be a big surprise to the markets and cause significant fluctuations in values and the dollar. Democrats still have a slim chance to turn the tide in the Senate, whose elections conclude next January.
Oleksandr Martynenko, head of the ICU group’s corporate analysis department, said this in a comment to RBC-Ukraine.
Speaking of possible changes in the economic policy of the authorities after the US elections, the expert pointed out that the greater probability that the Republicans will retain the majority in the Senate gives the Democrats very few opportunities to implement their program.
“This brought more relief to investors, because one of the key components of this program was the increase in taxes for US companies, which would have a negative impact on the earnings of companies and their stocks,” Martynenko said.
On the other hand, as the analyst pointed out, the hopes of investors who expected more favorable conditions for green energy companies, to which the Democratic Party pays great attention, were not fulfilled.
“There are many influential representatives of the oil industry in the ranks of the Republican Party, so they will not allow the implementation of the majority of the green program of the Democrats,” the UCI expert is sure.
Apparently, as Alexander Martynenko made clear, investors do not believe that a prolonged vote count in the presidential election and likely litigation can fundamentally change the election results. This, in his view, served as a strong improvement in sentiment in financial markets. While on the eve of the elections, the risk of contesting the results by the two parties was assessed as high.
“The end of the election campaign sent a signal to many investors that they can once again increase their positions in risk assets. The announcement by Pfizer Inc and BioNTech on the efficacy of the new vaccine further strengthened optimism in the markets.” the expert believes.
In his opinion, in the near future the spread of the pandemic, its impact on the global economy, as well as the events surrounding the vaccine will come to the fore.
“It may still be months before mass vaccination, while the damage from the escalation of the pandemic and the tightening of quarantine measures will continue to grow. All this can lead to greater volatility in financial markets,” admits Alexander Martynenko.
We will recall, on November 7, that Republican Joe Biden announced his election as President of the United States, which led to the growth of world markets.
As RBC-Ukraine reported, global stock indices soared to record levels after Pfizer announced on November 9 that its experimental vaccine is more than 90% effective in preventing COVID-19. On Wall Street on November 9, the Dow Jones was up 2.95%, the S&P 500 was up 1.17% and the Nasdaq was down 1.53%.
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