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LGT Navigator: Biden wins the election, but Trump (still) clings to power

November 9, 2020

The Democratic challenger Biden secured the necessary majority in an extremely hard-fought presidential election with 290 electoral votes and is thus on course to become the 46th President of the United States. Although Trump and his Republicans are still appealing to the courts and trying to contest the election results, this latest uprising seems rather desperate and is likely to be on thin ice.

Joe Biden 46th US President

Joe Biden finally made it into the White House in the third attempt. The ticket with vice presidential candidate Kamala Harris, the first woman in this office, reached more than 75 million votes - a historic record. Although one cannot (for the time being) speak of a blue wave, the result is clear with 290 votes for Biden and 214 for Trump. However, the incumbent president does not (yet) seem willing to give up power without a fight and is trying to take legal action against the final result of the elections. Meanwhile, the race for the majority in the Senate is going into overtime. In Georgia, for example, two runoff elections will not take place until January 5, 2021. If the Democrats win both open Senate seats, the Senate would be 50-50, with Harris as the new Vice President having the casting vote in the event of a tie. For the Republicans, after losing the presidency and the Democratic House of Representatives, this would be a real catastrophe.

Hot election, cool stock markets, Biden creates optimism

In Asia, most stock markets opened the new trading week with strong gains in some cases. The (preliminary) final result of the US presidential election, which has been known since Saturday, gave investors confidence and the markets seem to be looking for further fiscal stimulus under the future US President Joe Biden. In Tokyo, the 225-stock Nikkei index rose by around +2.5% and in Hong Kong the Hang Seng index was up around +1.7% from Friday. On Wall Street, the American stock indices on Friday ­ even before the announcement of Biden's victory by the major US media houses ­ had changed very little and closed a profitable week without a clear direction. The Dow Jones Industrial closed with a moderate daily loss of -0.24% at 28 323.40 points, but recorded a solid plus of just under +7% for the week, with the leading index making up for the previous week's loss of around -6.5%.

While confirmed Covid-19 infections exceeded the 50 million mark worldwide and the number of deaths related to the virus reached 1.25 million, newly elected US President Biden promises to make the corona crisis a top priority. Elected Vice President Harris is to head a new corona task force with proven scientists and virus experts. In the US, more than 100 000 new Covid-19 cases are counted per day and the virus has already killed more than 230 000 Americans.

Recovery in the US labor market gains some momentum again

In the shadow of the US presidential elections, the labor market report published on Friday turned out to be clearly better than analysts had expected. According to the report, 638 000 new jobs were created in the economy as a whole in October. The market consensus was 530 000, and the two previous month's figures were also revised upwards by a total of 15 000 jobs. In a separate survey, the unemployment rate fell surprisingly sharply in October from 7.9% to 6.9%. Analysts had expected a much more moderate decline to 7.7%. Thus, the recovery on the labor market appears to be slowly continuing despite the ongoing dramatic pandemic situation.

 

 

Economic Indicators November 9

MEZ Country Indicator Last
07:30 SZ Unemployment Rate (October) 3.3%
08:00 GE Exports (September, y/y) +2.4%
08:00 GE Imports (September, y/y) +7.0%
09:00 FR Business Climate (October) 101.0
10:30 EZ Sentix Economic Perspectives (November) -8.3

Earnings Calendar November 9

Country Corporate Period
US McDonald's Q3

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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US employment growth remains dynamic at the beginning of the year