Dubai: Although clarity emerged on the US presidential election, investors will look beyond the win by president-elect Joe Biden, and view if a divided government can slow post-pandemic progress for the top economy.
ÔÇťMuch of the president-electÔÇÖs agenda will be dead on arrival with the Republicans maintaining control of the Senate,ÔÇŁ cautioned Paul Ashworth, Chief North America Economist at Capital Economics.
ÔÇťBut there is still a chance of more fiscal stimulus being passed, albeit probably not until after Biden takes office on January 20.ÔÇŁ
After the majority of the US networks called it, Joe Biden declared victory as the next US president, taking over from current head of state and government Donald Trump, but the DemocratÔÇÖs term wonÔÇÖt start till he takes office in January.
Markets digest Biden-win
Wall Street had taken a breather on Friday after powering through four straight days of gains in a week that was defined by an unsettled presidential election.
However, stocks ended last week strong after markets largely digested a Biden-win, while the monthly jobs report further underscored the hurdles still facing the economy amid COVID-19.
Meanwhile, Biden said he will meet with ÔÇťa group of leading scientists and experts as transition advisorsÔÇŁ on Monday to start plotting out plans and policies to fight the coronavirus.
ÔÇťOur work begins with getting COVID under control,ÔÇŁ Biden said Saturday night during his speech. ÔÇťWe cannot restore the economyÔÇŽuntil we get it under control.ÔÇŁ
Focus back on COVID, stimulus
On Friday, the US broke another pandemic record, reporting 132,700 new COVID-19 cases. The following day the country recorded another 126,100 new cases, which marked the fifth consecutive day of more than 1,000 deaths related to the coronavirus.
ÔÇťMore than 20 million are on unemployment. Millions are worried about making rent and putting food on the table,ÔÇŁ Biden said Thursday. ÔÇťOur economic plan will put a focus on a path to a strong recovery.ÔÇŁ
Part of BidenÔÇÖs vision includes more stimulus aid. As part of his campaign, he created the Emergency Action Plan to Save the Economy, a document that provides insight on the direction he may lean once he takes office.
The route to passing another stimulus package before and after the inauguration is projected to be rocky, contentious and extremely partisan.
More volatility ahead?
Analysts say that although markets havenÔÇÖt displayed any knee-jerk reactions till now, that doesnÔÇÖt mean that price action canÔÇÖt get much choppier in the days and weeks to come.
Analyst bias largely remains bullish and investors are advised to take no action until any progress is made on another trillion-dollar economic cash injection plan.
ÔÇťThe focus for the markets for the days ahead is not the expected noise created by the Trump team, but how much the Republican party apparatus is enabling this noise,ÔÇŁ Alex Neale, an analyst at brokerage ADSS.
ÔÇťYou would hope that decency would prevail and they would make it clear that this nonsense has to stop," Neale added. "But even then it is difficult to be confident that Trump would even listen.ÔÇŁ
Major Gulf markets mixed
Trading on most GCC stock markets were a mixed bag on Sunday as investors weighed the implications of Joe BidenÔÇÖs presidential win on the worldÔÇÖs largest economy.
DubaiÔÇÖs main share index (DFM) gained 0.9 per cent, led by a 1.9 per cent increase in Emaar Properties. However, in Abu Dhabi, the index (ADX) lost 0.3 per cent, hurt by a 1.4 per cent fall in the countryÔÇÖs largest lender First Abu Dhabi Bank.
Elsewhere, the Gulf regionÔÇÖs largest bourse, Saudi ArabiaÔÇÖs Tadawul, rose 0.6 per cent in early trading, while the Qatari index (QSI) dropped 0.4 per cent, as most of the stocks were in negative territory.