Markets embracing Biden victory, but uncertainties remain for investors

Stuart Clark, portfolio manager at Quilter Investors, comments on what Jo Biden's US Presidential Election victory means for investors…

“After days of waiting for the mail to arrive, over the weekend we finally got a result in the Presidential election. So long as there are no legal surprises over the coming weeks the US has a new president-elect in the shape of Democrat Joe Biden. We suspect this won’t be the last we hear of the Trump’s but for now one element of the uncertainty is resolved. One question to be asking in the future may be which, if any, of the family appears on the GOP ticket in 2024.
“That said, the US political system continues to throw curveballs when least expected. There will be a run-off election in Georgia for the remaining Senate seats in January and this is likely to decide whether or not Biden can enact his agenda and push through the policies he promised to introduce. Without it, we very much see the status quo dominating once again.

“For now, however, markets seem to be embracing the news and have not been too unsettled by the lack of clarity last week brought. For long-term investors it goes to show that this election is a timely reminder to block out the noise and not be swayed by certain political events.
“Looking at what this means for investors, it is likely that the extent of tax reforms, healthcare or the move to make the economy more environmentally friendly will have to be scaled back given the lack of Republican support. Infrastructure remains an area where we might see some cross party collaboration and an area that should benefit investors over the next four years. We should also now begin to see some movement on a new stimulus package as part of the Covid-19 recovery, but it is unlikely this will be the amount the Democrats would have been hoping for.”