The US stock price has risen quite sharply in response to the tense US elections.
For the time being, it looks like Joe Biden, the country’s Democratic presidential candidate, is much more likely to become the next US leader. However, Donald Trump has drawn attention to the irregularities of the elections, and in this respect the court may have to say the final word. This may even delay the outcome of the official elections for a few weeks.
However, it is clear that the dominance of the US Democratic Party on the US political scene will not be as great as was estimated a few days ago. It would also mean that making any “bigger” decisions in the US will be very difficult, which on the one hand is probably not so bad at all. Namely, any change in the USA may not be so rapid and radical, and politics as such may be more predictable, or – the inability of politicians to put their noses everywhere and change everything drastically could potentially mean that less will be done. Historically, in the case of the United States, when Congress is divided in this country, stock markets tend to do quite well.
One of the things that can be more difficult to change in the US is, for example, taxes. Joe Biden’s regime has largely been associated with much higher taxes and tighter regulation. If it has a strong and significant opponent, such decisions may be more modest. Accordingly, stock market participants are also trying to assess such a scenario. Less rapid tax increases suggest faster economic growth and corporate profits. In fact, the basic assumption is that such a fragmented US power will be less intrusive on the economy, not daring to raise taxes and regulations so much on US companies.
The share price of US technology giants has risen particularly sharply recently. Both leading US political forces have drawn attention to the fact that the power of these companies is already too great. However, at the same time, they do not have any consensus on what to do with this situation – everyone has their own opinion on it. This may mean that the restriction of the power of large technology companies in the United States may also be slower and less decisive with some, for example, new comprehensive laws.
In general, however, it should be emphasized that the picture is rather vague and any conclusions may be premature. At such times, there may also be difficulties, for example, in agreeing the next pandemic US aid package for their economy.
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