- Joe Biden has been elected President according to all news networks.
- Clear victory mostly priced by markets.
- Two Georgia Senate races are critical to fiscal stimulus and of interest to markets.
President-elect Joe Biden – not former Vice-President anymore. The Democratic candidate has defeated President Donald Trump according to the Associated Press, NBC, ABC, CNN and also the conservative Fox News network. Moreover, the popular pro-GOP station has called Nevada and Arizona to Biden, while others are waiting for more results.
Will Trump concede? That remains an open question, but perhaps irrelevant for markets at this point. A win for Biden has been mostly priced in by investors, who collectively bet on a mere delay in the results, not a contested election. After Fox's call, all the president's unsubstantiated claims of fraud seem to fade into the background.
The more important question is – how much is Biden's victory priced in? Mostly so. Stocks advanced throughout the week but paused on Friday, seemingly slowing down with the vote count. Equities could extend their gains on Monday before profit-taking – a classic "buy the rumor, sell the fact."
The safe-haven US dollar has been on the back foot around the elections, and it may now extend its falls before stabilizing. What about gold and the next moves for markets in general? Georgia is set to be on markets' minds.
Two Senate run-offs are due in January and they are critical for control of the upper chamber. With Republicans on course to have 50 seats and Democrats 48, a win for Dems in the two run-offs would cause a tie in the upper house. Vice-President-elect Kamala Harris would be able to break ties, thus flipping the Senate from Republicans to Democrats.
A trifecta of wins – the Presidency, the House, and the Senate – would allow Biden to push through an ambitious stimulus package that markets desire.
On the other hand, the smallest majority possible is unlikely to enable Dems to pass major reforms. Business-unfriendly policies such as tax hikes and regulation are unlikely to pass muster as some of the party's Senators come from conservative states. That would be a win-win for markets – and that would depend on opinion polls toward the two run-offs.
Surveys in Georgia were considerably more accurate than in other states, including neighboring Florida and far away Wisconsin that was substantially off. Therefore, investors are unlikely to wait for the vote from the Peach State to move.
Georgia's fresh esults showed Republicans ahead of Democrats in the first round of Senate races, but Biden is ahead of Trump in the presidential elections. The race for the White House will be called only after a recount, but in any case, it is clear that the two Senate races will likely come down to razor-thin margins.
Overall, Biden's election is mostly priced in, and now Georgia is on markets' minds.
See: 2020 Elections: Markets are cheering, but what exactly? Some answers and what's next
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.