InvestorQ : Why has the US markets been reacting so strongly to a likely Biden victory? By when would we know the final results of the US elections?
Lavanya Subramanian made post

Why has the US markets been reacting so strongly to a likely Biden victory? By when would we know the final results of the US elections?

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Anamika Sodhani answered.
3 months ago
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Let us talk about the latest update on the US election results first. The magic mark is 270 and Biden is still about 10 seats short although most estimates are pegging that he should easily get through this mark. We will have to wait for the final outcome.

In the US each of the states are counted separately and then there are the postal ballots and the online votes that are also counted. The US does not use EVMs but does manual counting in all these cases so the final result may take some more time before it is announced.

Interestingly, you are quite right that Wall Street has reacted extremely positively to the prospects that that Joe Biden will be the next President Elect of the United States. Most pre-poll surveys had already placed Biden way ahead of Trump although the actual contest was a lot closer than imagined.

However, the NASDAQ and the Dow have reacted very positive. For the companies, there could be a negative factor as Biden is likely to withdraw most of the tax concessions to the corporates but it would also mean a more meaningful involvement with China.

Markets had been disappointed that Trump had actually triggered a trade war with China over his obsession with the trade deficit. If Trump loses the election, he would be the first US president since George Bush Senior in 1992 to not get a second term.

The last 3 presidents of the US held office for a continuous period of 8 years. That includes Bill Clinton, George Bush Jr. and Barrack Obama. In the case of Bush, despite his relative unpopularity, he had managed a second term.

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