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Wall Street bet on Joe Biden to win the White House and have Republicans occupy the Senate last week as the election results become clearer. Such an outcome would allow more modest policies on taxation and regulation. But the fight for Senate control is still in limbo, with Senate second-round elections in Georgia.
“It’s what happens in the Senate race that could determine the next move up or down,” said Michael Hewson, chief market analyst at CMC Markets. “If that looks like it might change in the second round in January, then you might see some weakness in parts of the stock market in case the Democrats get their blue wave wish.”
“What we need in the United States right now is someone who can truly control the coronavirus outbreak. Investors have confidence that Biden is giving them that assurance,” said Naeem Aslam, analyst in Market Manager at AvaTrade.
Despite a Biden victory, investors are still concerned about President Donald Trump’s reaction to the electoral defeat in the weeks to come.
“The only variable that cannot be factored in is that President Trump becomes even more erratic and unsettling over the next ten weeks,” said Brad Karp, chairman of Paul, Weiss, Rifkind, Wharton & Garrison LLP. “There is no telling what he might try to do and no ability to predict how the markets might react in response.”
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