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09-11-2020<\/em><\/strong><\/p>\n George Lucas, Raiz Group CEO<\/em><\/strong><\/p>\n This week Democrat Joe Biden was named president-elect after defeating\u00a0Republican Donald Trump\u00a0to become the 46th president of the United States.<\/p>\n <\/p>\n After more than three days of counting, Biden gained the 270 Electoral College votes needed to claim victory with a win in the key state of Pennsylvania. However, Trump has still not conceded defeat, repeatedly alleging electoral fraud, and launching a spate of court action.<\/p>\n If Trump continues with these allegations and does not concede, then the uncertainty that this creates may cause issues for the market.<\/p>\n <\/p>\n This election has always been about the US Senate results for the markets.\u00a0 The Republicans will probably still hold the Senate, and this is what the market is expecting.<\/p>\n Because of the Biden win I expect fiscal stimulus will now be taken off the agenda in the US Senate, while Trump is still President until late January 2021. The Republicans will change their focus to the appointments of judges to the federal courts, which have to be ratified by the Senate as well as other initiatives that Biden may not ratify.<\/p>\n When it comes to future stimulus, it\u2019s likely that the amount will be less than if the election had resulted in a so-called \u201cblue sweep\u201d with Democrats winning Congress and the Presidency.<\/p>\n On stimulus, Republicans in the Senate will likely argue that the US economic recovery is occurring without another large fiscal support package.\u00a0 This is supported by recent economic numbers such as the employment report. The current strength in the US economy, however, may be due to the US Federal Reserve doing all the heavy lifting and printing money.\u00a0 This is more likely to continue with a Republican Senate.<\/p>\n <\/p>\n On that point, looking ahead the Fed may need to print more money to do more of the heavy lifting as fiscal stimulus will do less, which will see US treasuries yields stabilise or even fall.<\/p>\n A fall in US yields will weaken the US dollar, meaning that domestically we will continue to see support for the Australian dollar due to commodity prices and weakening yields in the US. \u00a0We are already seeing this being factored into the market for the Australian dollar.<\/p>\n If the US yields continue to fall significantly then the Reserve Bank of Australia will likely be forced to reduce yields further to try and keep the local currency from strengthening too much. Good luck with that.<\/p>\n \u00a0<\/strong><\/p>\n Turning to Washington\u2019s crackdown on big tech, the risk of anti-trust cases against firms like Google and Facebook falls with a Republican Senate and Democratic President.<\/p>\n So, on this front expect to see long term dominance now from the large US tech companies in the US stock market. It\u2019s not value investing, but it\u2019s growth investing. What\u2019s more, without a significant majority in the Senate, the Democrats will probably also be unable to increase corporate taxes. With less chance of tax hikes, there is more chance of a further market rally.<\/p>\n <\/p>\n <\/p>\n Important Note: <\/strong>The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.<\/em><\/p>\n Investors only:<\/strong> The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.<\/em><\/p>\n General advice warning: <\/strong>The information contained in this Document is general information only. It has been prepared without taking account any potential investors\u2019 financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" \u00ad 09-11-2020 George Lucas, Raiz Group CEO This week Democrat Joe Biden was named president-elect after defeating\u00a0Republican Donald Trump\u00a0to become the 46th president of the United States.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[1621,3145,2967,339,1030,332,386,2763,947,3421,151,940,289,1421,1452,3422,3147,2680,954,3024]}Why the US Senate race matters<\/h3>\n
What the US elections mean for Australia<\/h3>\n
Big tech dominance to continue<\/h3>\n
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