Economists and investors say US election result ‘the perfect outcome’

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Donald Trump may not yet have conceded the presidency, but Joe Biden has been declared President-elect after turnarounds in key states.

Mr Biden has been declared the winner, which most of America and the world – apart from Mr Trump – have accepted. Mr Trump is mounting a series of legal challenges in a bid to reverse the result.

And while it’s early days yet, Aussie fund managers say this election is the perfect outcome – and markets here and worldwide have already shown improvements since the announcement of Mr Biden’s win.

Early indications are that Australian sharemarkets will have a firm opening this morning as markets move past the uncertainty of the US presidential election.

“Although a Biden win was pretty much priced in by the markets, his victory will eliminate uncertainty – which they loathe – and they will rally further as a result,” chief executive of financial adviser deVere Group, Nigel Green, told The New Daily.

“Even possible legal challenges from Trump will be dismissed by investors, who will instead be focusing on the renewed certainty and stability that a Biden White House will bring.”

Economists are also excited because the President-elect will be a steady influence as he steers the US back to ‘normality’, while the prediction of a Republican-controlled Senate would block any anti-business reform.

“While there is a possibility that the Democrats could win control of the Senate via runoff elections in Georgia, the most likely outcome is that Democrats will retain control of the House with Republicans retaining the Senate,” said economist Shane Oliver.

This is a case when split government is a good thing for investors, Atlas Funds Management chief investment officer Hugh Dive told The Age.

“It’s a constrained Biden administration,” he said.

“The divided Congress [would] stop some of the outlandish policies like the Green New Deal, replacing all the buildings, all that wish list stuff.”

Not even not-quite-outgoing Donald Trump will cause any long-term market volatility, says Mr Dive.

“It will create a lot of noise and play well to his base, but this is not Nicaragua, this is not a country where you can cling to power. That stuff will fade out.”

A Republican-strong Senate would hinder the Democrats from pushing through some of their more radical policies, such as higher corporate taxes and greater regulation of the technology industry.

“It’s hard to put [through] radical legislative change when you have a split presidency and Senate,” said Investors Mutual investment director Anton Tagliaferro.

“So, at the moment, there’s a bit of a relief rally where some of his [Mr Biden’s] more radical policies won’t be able to pass.”

The markets are happy, too, having already enjoyed a strong week of trading on the promise of the ‘fairytale result’, and Australian stocks are looking at big increases on Monday.

Investors may look to increase shares in new energy technology, as Mr Biden will likely seek to stimulate the US economy on the back of new energy investments, meaning Aussie resources such as nickel and lithium could soon be in demand.

“[President] Trump seemed to be pushing more into the old world, opening up coal and doing more oil wells,” said Holon Global Investments research director Tim Davies.

“[Mr] Biden seems more focused on shifting and looking forward with the new energy policies.

“Electric vehicles will be a huge growth area,” Mr Davies said.

And progression on climate action is not the only way a Biden-led administration will help Australia.

While our own government’s follies are mostly to blame for sour relations with China at the moment, improved relations between the US and China should mean we will no longer be “caught up as collateral damage in the US-China trade dispute” according to Australian Industry Group chief executive Innes Willox

The US election result has been the cherry on economic improvements across the board over the past couple of weeks.

Australian share futures are looking at a 15 point increase, the ASX200 finished 0.8 per cent higher on Friday, and 4.4 per cent up on the week – its best performance since early October.

Wall Street performed well last week, despite US election uncertainty.

The weekly ANZ-Roy Morgan consumer confidence index, which indicates future household spending, has risen for nine straight weeks to its highest level since March.

The Reserve Bank’s decision to cut the cash rate to a record-low 0.1 per cent has been labelled as a kick in the guts for retirees but overall should have positive market effects.

The Big Four banks didn’t pass on the reduction to their customers’ variable rate mortgages but reduced the rates on their fixed-rate mortgages.

The monthly Westpac-Melbourne Institute consumer sentiment survey for November will be issued this week, but last month’s was the biggest positive response to a budget in at least 10 years.

Things are looking up.

But what does it mean for Australian retirees?

“Australian retirees who are playing the long game should not fear the election outcome. US monetary policy (interest rates governed by the Federal Reserve) is independent of politics and will remain highly supportive for growth assets like shares and property,” Muirfield Financial Services managing partner Melinda Planken recommended just prior to the election.

“Our underlying recommendation is for investors to remain flexible and focused on longer term outcomes.”

How do you think the US election will affect your retirement? Are you pleased with the result?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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47 Comments

Total Comments: 47
  1. 0
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    The result has no bearing on my retirement at all. I have no investments.

  2. 0
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    Good spin Leon.

  3. 0
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    Joe Biden is not President. The media does NOT elect the President. There is recounting and lawsuits going on. How dare you report this to your group. Your should be ashamed of yourself and learn the American law before you blindly follow ‘the fake’ news…

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      You’re the one spreading fake news. The media didn’t elect the President, it reported the results. The lawsuits are the frivolous actions of a sore loser. They won’t change anything. Biden won. End of story.

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      Haha, the odd vote by dead people or votes not signed won’t be enough to make any difference. There’s been over 145 million votes obviously there will be anomalies coming through but not in the millions, which what would be required.

      And remember some of those postal votes would have been for Trump as well, I’m sure not every single postal vote was for Biden, so does Trump want t dismiss the “illegal” votes that HE got too?

      The process he’s going through now is purely to show his loyal disciples that he didn’t give up, that he did win but was screwed out of the win. They will lap it up like they did with everything else he has said and done over the last four years.

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      GD, for real? Biden is in, Trump is out, and thank goodness. It is a decisive win and the people have spoken. They can recount and they do so if less than .5% between the two but it won’t be in enough to change the outcome. The world has had more than enough of Trump and want someone they respect. Trump can go play golf which is not much different to his days in office. I doubt he could manage a chook raffle and Pence and others have been governing behind the scenes. He and his family need to start packing. I am so happy he did not get another term which would have been a travesty.

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      For the record, Mr Biden is the President elect. Mr Trump is and remains the President until 20 January 2021 when Mr Biden is inaugorated as the new president. Mr Biden can’t actually do anything until then. There is only ever one President at a time and currently that is Mr Trump.

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    I don’t think that Biden will make any difference to me personally or Australia generally. We need to repair our relationship with China, our biggest trading partner and the one which the LNP led by Scotty from marketing has alienated to the nth degree.

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      Hitler and Hirohito were never easy to deal with either and if our forefathers would have given into them we would speak Japanese today probably. If trade is the only measure of sovereignty, we might as well join “the yellow peril” like Victoria. Your kids would curse you for it. We should become more self sufficient and produce what we can sell on the open market, not only to China. If our standards of living take a hit, I am prepared for that.

  5. 0
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    It’s not a Biden win that has resulted in improvements in the share market but certainty.
    Remember how well markets did under trump before Covid and the economy is rebounding under him.

  6. 0
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    I was excited by a Biden win, and was expecting to see good returns with my Superfunds, but a guy who know who seems to know way more than me about the markets reckons that some of Bidens economic plans might not be good for the markets. But Biden doesn’t come in until late january, so I think we will see some increases initially and then will slow down. Who knows.

  7. 0
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    The Biden election has implications for everyone. Huge stimulus packages for social welfare and green packages. Australia’s total debt $7.6 trillion. 8 million on some form of welfare. 10% of workers pay 70% of income taxes. Due to low interest rates, share prices, house prices and bonds are significantly overvalued. Nearly a million households in financial and/or mortgage stress. A 2-3% rise in interest rates could cause a depression as many households are maxed out on debt. There are no reserves left. Interest rates may rise if food/commodity and electricity prices rise due to green policies. Who is going to pay for all of this. The rich already have their money overseas. That leaves hard working middle class Australians. Death duties and land taxes are guaranteed.

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      BigAl – can you tell us little people where we can send our money to overseas? We would like some of that as well, or do you have to have squillions to be able to do that? Let us all participate. I for one am not even allowed a bank account in the place all my family live in.

  8. 0
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    Biden hasn’t won yet

  9. 0
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    A Biden presidency won’t affect me. Thank goodness the BLM, Antifa and born-to-rule socialists didn’t get control of their House and Senate. The Republicans won’t permit severe tax changes (or hopefully other Green-imposed madness). Biden will be a lame duck president. Personally I hope the Republicans come up with a winnable candidate who can ensure that the socialist Harris ends her cake-walk into high office in 4 years, that is if Biden isn’t declared mentally unfit before then. He may be President but his ties to highly questionable family business activities won’t be forgotten. All very well for Biden to re-join the Paris rip-off – what a shame gutless global leaders put their citizens up for costly policies that stifle economic growth.

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      Unfortunately Brissiegirl, whilst Mr Biden has the unwavering support of the media in America, his very questionable dealings through his son will not be investigated. The media has protected Mr Biden through this entire election process, something Mr Trump was never afforded throughout his Presidency despite the numerous attempts by the Democrats to discredit him.

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      On second thoughts, I feel the Biden outfit could be detrimental to Australia as he intends to re-join the WHO and other discredited organisations, including climbing back on the costly global warming bandwagon. There has been little to no public demonstrations about the Democrats “winning”. If the Republicans had won there would be widespread violence, they would be burning down anything in sight, including their glorious American flag. Trump was never a career politician, so I excused his various gaffes because his greater drive was to try and revive America to the great nation it was before the Clintons, Obama and Co. If Trump cannot produce sufficient evidence to legally force invalidation of state electoral results, then I hope he starts Trump Media that supports conservative values and gives the real news to the global community.

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      Biden would certainly fit in with a Shorten-style Socialist Administration (soak the rich and hand out food stamps). So next time vote ALP and we have a beautiful relationship with the USA again – but it might cost us!

  10. 0
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    I can’t help thinking this result is very much be careful what you wish for. In the rush to condemn Mr Trump after 4 years of unrelenting personal, political, legal and partisan (mostly failed) attacks aided and abetted by mainstream media, it is easy to forget that Mr Trump did get some runs on the board. Employment was at an all time high pre-Covid benefitting those disadvantaged most; American businesses returned to the USA bringing jobs with them; America became self-sufficient in fuels reducing the reliance on an unstable Middle East; troops round the world went home; peace was brokered between Israel and its neighbours; China and Iran were called out (something Mr Obama had no stomach for) over their behaviour, to mention just a few.

    Yes Mr Trump is crass and has no filter but at least you knew what he was thinking whether you agreed with him or not.

    Given Mr Biden’s demonstrated unstable mental and cognitive state, Ms Harris is the very PC understudy (woman, black, Asian, child of immigrants – ticks all the boxes) likely to contest for the top job in 4 years if not before.

    Mr Biden may be riding a wave of enthusiasm right now (before his inaugauration) but he is going to have great difficulty implementing his utopian views. Just wait until he tries to raise taxes, shut down the oil and gas industries, kowtows to China and attempts to rescind everything Mr Trump put in place (because Mr Trump put them in place). Americans need to remember that Mr Biden did not win the election with the predicted ‘Blue Wave’ landslide. He may well claim the biggest turnout of voters, but so can Mr Trump. From a population of over 300 million about 50% actually voted and almost 50% of those voted Republican. Mr Biden will not get an easy ride once reality sets in – and he has 50 States to contend with and half did not vote for him. All Australia can do is watch from the sidelines.

    • 0
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      Have to agree with your comments. Unfortunately the millennials detest Trump. They have no understanding of the history of socialism and expect someone to look after them. As Margaret Thatcher says “Socialism is great until you run out of other people’s money”

    • 0
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      KSS, the mainstream media in America, particularly that enemy of Australia, Murdoch, supported trump at every stage, you can’t re-write history just because Trump decided to try.

      It is well documented that Trump attempted to destroy everything that Obama had done, it would not be unreasonable for a Biden govt to re-visit those acts, etc. and re-instate them if they were still sensible, as acts done for personal revenge are probably a bit suss.

      That america’s economy was improved under trump is arguable if you look only at the stock market, certainly his fight with China did not help and the poor, – Trump’s ‘base’, were spectacularly worse off well before the Pandemic, – Trumps gift to America, – the worst managed Pandemic in the World, the which it will be very difficult for Biden to remove because Trump gave it such a broad spread.

      Insofar as Economics between Obama and Trump, Trump reaped the reward of Obama’s good management, but did not go on from there.

      However, Obama made a serious mistake in giving the trillions of Dollars (called Quantitative Easing) during the last recession, to the rich, whereas China used it’s version of Economic Stimulus to build their economy, allowing them to catch up to or even surpass America, and honest appraisal of that situation should be very salutary to you. KSS.

      Trump continued that process of wasting money by giving to the rich, so it will be interesting to see what the New Govt. in the US will do, – btw that money is not paid back and does not have to be, Economic Rationalism is only a theory, now a disproven one.

      Presidential Health:- Biden may be getting old, but that is not classified as a Disease, whereas Trump is a proven psychopath, – definitely a disease and definitely not acceptable for a President to be one.
      In any case, Biden has his very supportive wife, and also the very talented Vice President Elect, Kamala Harris, who is very talented despite your derogatory remarks about her.

      BTW, American elections are usually close, but Biden got significantly more popular votes than Trump and also the Electoral College, where he won soundly.
      Biden certainly has more support in America than Morrison has here.

      It is definitely a blessing that Morrison will no longer have Trump to blindly follow.

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      Sorry to say Obama did nothing useful for America. In contrast Trump reduced unemployment even in black communities, got a better deal with China and oversaw peace deals between Israel and several Arab states – a huge achievement. As for Biden, he won’t be in control because of his dementia. The puppet masters are Pellosi, Cortez and Sanders, all eco Marxists and socialists. I not in favour of our school kids taking the and giving BLM salutes, nor am I in favour of our history books being rewritten with Captain Cook, Churchill and George Washington being branded fascists. At least Trump had a good go at getting rid of the left wing lunacy that’s now going to run rife through Australia with more whinging tribes who expect everyone to kowtow to their stupidity.

    • 0
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      Well said KSS, you have nailed it, Big Al on the money also

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      Big Al, its painful for seniors to see how the young are being socialised. They haven’t lived long enough to know what that means, and the clever manipulation of their minds is evident to those of us who know our history. When the young woke mob talk about black lives matter and various fashionable do-gooding topics, we can see how their minds and feelings are subversively being weaponised. The universities, the woke media, teachers from infant school upwards, the younger members of the medical profession, well they haven’t been exposed to the stories and lessons of history, have they. But they will pay for their over-influence – the hard facts will come and then they’ll have to rebuild for themselves. Those who died to keep what was worth having would turn in their graves.

    • 0
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      I’m not young Brissiegirl, nor has my mind been manipulated but in my opinion Trump is certifiable and the world is better off now he is no longer President of the U.S.A. Trump has not helped his country during the Pandemic. If you’ve ever been to the U.S, you would know the poverty that exists during his Presidency and it’s nothing to be proud of. I realise President Biden has to wait until 20 January for his inauguration, but it will happen. The election results are not fake news, and no amount of lawsuits will change the facts.

    • 0
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      Dear Sundays, if Trump is certifiable he’d make a good room-share with Biden who so often hasn’t remembered where is, who is his son, who is his grand-daughter and is so confused he removed his mask after speaking, replaced it then picked up the microphone when there was no more to say. He referred to Trump as George. When Biden so foolishly trots onto the stage, he looks like the aged Cliffy Young who shuffled from Melbourne to Sydney but I doubt Biden could shuffle more than the few metres necessary to give pretence he’s young and fit. Trying to look agile when clearly your brain is nearly dead is a ridiculous image for an American President. At least Trump did what he promised the electors, a commitment-fulfilling President.
      I know the people on this forum aren’t generally young, but if we look around us at those burning our flags, rioting, gluing themselves to busy roads, abusing police and disturbing the peace, we can easily see where they’re heading.

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