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Post-Election Insights

Post-Election Insights

November 13, 2020
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As the U.S. digests the election results from last week, we are reviewing potential impacts related to the economy and financial markets while continuing to account for the challenges faced during a global pandemic. At this point, we are operating under the assumption that the results of the Presidential election will not be overturned after recounts and legal challenges by the current administration. However, it remains to be seen as to whether the Republicans hold the Senate, and the outcome of those runoff elections will ultimately determine how much of Biden’s legislative agenda can be implemented.

Since the election, the stock market has reacted favorably to the prospect of a split government with Biden as President and the Republicans holding the Senate. Under a Biden presidency, we would anticipate executive orders which would increase regulation on business. Offsetting that, we should be getting fiscal stimulus in the coming months and the Democrats’ legislative agenda (including higher taxes and healthcare reform) would be constrained by a Republican Senate.

As of this date, the coronavirus is still causing a major drag on our economy. However, the market rallied this week on the great news that a vaccine could be ready before the end of the year. Market participants are obviously looking through to the other side of the pandemic.

While we are analyzing how both the election and virus might influence markets and portfolios we manage, we are generally very optimistic about 2021. A divided government, record low interest rates and a rebounding economy could prove to be solid tailwinds for both domestic and foreign stock markets.

Please call us if you would like to discuss.

 

Matt and Andrew