Votes are in. What's next?

Signum Global Advisors market and political experts offer insight on ramifications of Election 2020 results.

Millions of Americans are wondering what will happen once the results of one of the most contentious US presidential elections are finalized. What policies might the next president and Congress tackle? How big and when can we expect another stimulus deal? What might foreign policy look like?

Government policy specialist at Natixis Investment Managers, Susan Olson, talks to Charles Myers and Lew Lukens from Signum Global Advisors about Election 2020 ramifications in this November 5 Natixis Access Series video talk. Here are some highlights:

  • Market impact: The best outcome for the markets would be a Donald Trump presidency and a Republican-led Senate. The second-best outcome would be a Joe Biden presidency with a divided government (a Republican-majority Senate and a Democrat-led House). Markets seem to be responding well to either scenario.
  • Congressional gridlock: If Joe Biden wins, this will be the first time in history that the United States will have a Democratic president, a Republican-led Senate and a Democrat-led House of Representatives working together. As such, Americans should expect two years of gridlock.
  • Stimulus: An attempt at passing another big stimulus package during the upcoming lame duck session will likely not be successful due to partisan differences. Additional stimulus for airlines and small businesses may happen sooner but may disappoint markets. Look for a stimulus package – including fiscal help for most Americans, unemployment insurance supplements, increased Covid testing for schools, and allocations to state and local governments – to pass by late January.
  • Taxes/infrastructure: If elected, Biden’s proposed tax increases on businesses and the wealthy will not pass the Senate, nor will his large infrastructure package with allocations for renewable energy. Biden may have to rely on executive authority to push his agenda through.
  • Pandemic response: Biden’s Covid-19 response plan is similar to Trump’s, but he would appoint a Covid task force where science will drive policy. He would also add more funding for widespread testing and tracing, and vaccines and therapeutics. Lockdowns and shutdowns would be unlikely and would be determined on a state level by governors and mayors.
  • Health insurance: A revamped Obamacare health insurance program seems unlikely if Biden wins. He may have to rely on executive order to get even a scaled-down version passed.
  • Foreign policy: If Biden becomes president, look for him to do a 180-degree turn on relations between the US and the European Union. He is a strong believer in the EU and can be expected to work with them on trade, the pandemic, cybersecurity, climate change and national security issues. This could be a positive for markets.
This material is provided for informational purposes only and should not be construed as investment advice. Unless otherwise noted, the opinions of the authors provided are not necessarily those of Natixis Investment Managers. The experts are not employed by Natixis Investment Managers but may receive compensation for their services. The views and opinions are as of November 5, 2020 and may change based on market and other conditions.

All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

3305495.1.1