The uncertainty is gone, and the markets are free to breathe again. So what does a Biden administration mean for the markets?
With Biden controlling the Whitehouse and the republicans controlling the Senate, it’s expected any sort of government stimulus package will be smaller than expected. That’s not necessarily a bad thing either. It could result in the US Central Bank keeping interest rates down for longer, as well as more quantitative easing – further devaluing the currency. Not awful for us foreign investors!
Big investors are also happy the ‘blue wave’ scenario never materialised. Losing control of the Senate means some bigger policies such as with tax which the Democrats had planned will be harder to pass. H&L state what’s good for the US markets is often good for the markets around the world.
With this renewed stability, comes risk. US Tech is already at crazy heights, and while this doesn’t rule out further good performance it’s worth keeping in mind that a diversified portfolio both in sectors as well as geographically may not be such a bad idea.