Every four years, Americans embark on voting to determine their president. The United States of America citizens had their fifty-ninth presidential elections on 3rd November 2019. This election was fairly won by the democratic ticket, with Joe Biden as the US president and Kamala Harris as the vice president. Though the republican candidates had raised several concerns, it was evident that the democrats had won the elections. This election has had tremendous impacts on the US and global market because the US Presidential elections and the market are directly linked. It has also directly affected the laws, policies, and foreign relations of the country. With the new president Joe Biden taking office soon, he has the duty of appeal to both the Republicans as well as the Democrats.
The Performance of the Stock Market Now
It is expected that the stock market returns tend to be slightly lower for the next financial year, whereas bonds end up outperforming. This is influenced directly by the changes in the control of the White House. Analysts across the United States found out that the gains in the stock market averaged at 5%. On the other hand, if the same president was re-elected, these stock markets’ gains averaged at a slightly higher value of 6.5%.
As the new president elect, Joe Biden will control the senate to spearhead the changes in the policies of spending, taxes, and regulation. His leadership will bring short-term impacts on the market.
The Elections, COVID-19, and the Market
Covid-19 has been an international nuisance and has dramatically affected the market in the United States and across the globe. The pandemic has tackled a lot of industries, hindering every effort made by the government and business owners to revert things to normal. The elections in the United States were marked with a number of complaints from the republicans, which contributed to short-term volatility in their market.
The Market Impacts of Joe Biden’s Policy Stance on Major Issues
Joe Biden, the recently elected US president, is set to take over the White House in February. He is determined to put his policies to help uplift the economy and better citizens’ lives. His policy stance on the critical issues will affect the market this year.
He intends to invest in the fight against the Coronavirus pandemic by pumping $25 billion in the manufacturing and distribution of vaccines, and at the same time, improving the manufacturing and distribution of personal protective equipment (PPE). He also aims to advocate for local social distancing and other ways to reduce the spread of the coronavirus. President Biden has long-term plans to enable the US to be more independent when it comes to the capability to manufacture and sourcing PPEs, medicine, and other related materials to reduce its dependence on other nations. These measures will directly impact the US market. For instance, the pharmaceutical industries will be highly invested in to help develop vaccines for the virus, which will substantially increase their revenue. The same applies to the PPEs manufacturing companies, which will gain a considerable demand for the products.
Joe Biden also plans to get the US economy back on track. He intends to focus on reversing most of the tax laws signed into law by Donald Trump for wealthy people and corporations. He also plans to mitigate the recession that was induced by coronavirus by limiting his government agencies to buy goods and services mostly produced by their country to improve domestic manufacturing. This will go an extra mile in improving the economy and the hurting market.
The election of Joe Biden will see great efforts put forward to tackle climate change. For many years, climate change has been one of the biggest concerns across the world. Joe Biden intends to inject at least $2 trillion in this noble act. These funds are meant to improve clean technology, create jobs, make amendments in the automotive industry, and drive the United States back to the Paris Agreement.
Key Market Sectors Affected by the US Election
Healthcare is one of the significant sectors in every economy. It is a sector that is highly affected by election outcomes in the US. With Joe Biden as the new US president, a lot is expected to change. His policies will pressure the biotechnology and pharmaceutical industries because of a tougher stance on drug prices. This will likely weaken the health sector if not adequately managed.
Technology is yet another critical sector whose fate lies in the election results. Having won the elections, Joe Biden will spearhead the easing of restrictions imposed on technology-based industries such as Twitter by the Donald Trump administration.
Trade is a vital sector that generates revenue for the US government. Joe Biden and Donald Trump had conflicting approaches to trade matters as well as the engagement issue with China. Joe Biden’s win will see him use a diplomatic approach, such as using international organizations, e.g., the World Trade Organization, to change China’s trade practices. This will end the unilateral approach that was used by former President Donald Trump.
Taxes drive a country and are controlled by policies implemented by a government. Joe Biden promised not to increase taxes on citizens that earn less than $400,000 yearly. He will most likely need a Democratic Senate to help him enact his plans of increasing the statutory corporate tax from 21% to 28%. These would highly impact the market because it will affect a lot of investors’ businesses.
The US Presidential elections and the market is a large subject that needs a keen eye and sense to comprehend. The United States elections significantly affect the country’s market in enormous ways. It impacts the key government sectors such as healthcare, tax, trade, and technology. At the same time, it affects the handling of the global coronavirus pandemic, which is seriously harming the economy. Joe Biden’s win will see a lot of changes made, some of which are going to boost the economy and some of which are likely to hurt it a little more. 2021 is still young, and only time will tell how profound the elections’ impact will be on the US market.