Stock markets gripped by US election race – business live | Business
Heading into Election Day, markets were pricing a high likelihood of a strong Democrat sweep that would usher in major stimulus early next year, benefiting primarily US equities but also other growth-oriented assets. However, the results so far are much murkier. Currently, neither President Trump nor former Vice President Joe Biden have won enough electoral votes to legitimately claim victory, while control of the US Senate remains unclear (Democrats held on to the House of Representatives, which was wholly expected).
Uncertainty will thus remain over the next few days, if not longer. Results for the presidential election from key swing states such as Michigan and Wisconsin are expected tomorrow, but the crucial state of Pennsylvania will likely not have its final tallies until the end of the week. Moreover, Trump’s news conference laid open the prospect of litigation and Supreme Court involvement, which adds additional layers of uncertainty.
Democratic control of the Senate looks unlikely given that they lost toss-up races in Iowa and Montana and are currently behind in North Carolina (where they were slightly favoured). With at least one Georgia race moving to a run-off in January, there is the strong possibility that control of the Senate will not be known for months. However, even if Democrats manage to gain control, their majority will be slim. Hence, major legislation such as tax reform or expansion of health care is unlikely. A large stimulus may also prove difficult, though rising coronavirus cases and any potential economic slowdown could provide motivation for further fiscal measures.