Frankfurt, New York At the end of the week, the price fireworks ebbed, but: The stock exchanges have been celebrating the expected entry of Democrat Joe Biden into the White House since election night. The S&P 500 has gained a good seven percent this week and is already approaching its all-time high that was reached in early September. Likewise the index of the technology exchange Nasdaq, which even gained over nine percent. It’s been the best voting week for stocks since 1932.
According to Tilmann Galler, capital market strategist at JP Morgan Asset Management, the stock exchanges are “surprisingly optimistic”. Even before the decision was made, under the scenario that Democrat Joe Biden will become the new president, but the Senate will remain in Republican hands in Congress, “Biden will not be able to fully enforce his planned tax increases and will probably also regulate companies will be less clear ”.
In this “biden-light” world, a Republican Senate could block everything that appears too radical to the left, says Daniel Alpert of the Westwood Capital investment bank. “This is paradise for the markets.”
The unrest and negative consequences, such as an expected significantly smaller economic stimulus package and the increasingly spreading corona pandemic, are currently still being ignored. “But reality could catch up with the markets again soon,” believes Alpert.
Galler therefore warns against overestimating the price fireworks on the broad market and the influence of the elections. Jörg Zeuner, chief economist at the Union Investment fund house, is also rather skeptical, because: “The bottom line is that the economic growth potential should not be further strengthened given the political mix.”
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