Who lives at the White House doesn’t seem to matter much for financial markets. The underlying economic conditions and their driving factors are more important. Analyzing them to build investment portfolios is a process that always goes on, continuously.
And so November 3rd came and passed.
American democracy seems to be the winner of the 2020 presidential election, which saw the highest participation of voters in the last century: around 150 million, about 65% of the eligible population, higher than the 1908 record.
Democracy aside, there are still several steps before the electoral college process is complete. The recounting of votes, including postal ones, is going on in several important states. Biden has been named president elect, but the relatively small gap between the two candidates has expanded as the states complete their counts. In addition, Trump has filed lawsuits in several states to stay in the White House four more years. So it will be necessary to wait to know the name of the President, and wait to see whether the outcome is accepted or contested by the defeated candidate.
The scenario that seems realistic to exclude at the moment is the so-called “blue wave”, that is a large victory of the Democrats for the presidency and the two branches of Congress. The Democrats have reconfirmed themselves and maintained their majority in the House of Representatives, but it is too early to tell whether they can win a majority in the Senate. If that happens, it will be by a narrow margin.
In the markets we have seen, as usual, a surge of volatility before the elections. A phenomenon that happened the last time in 2016 and that has repeated this year with a similar dynamic, simply at higher levels.
Read more in our in-depth assessment.
