Investors make valuations on the day that give less clear results than expected in elections A better-than-expected performance by Democrats came as the US midterm bleak outlook on issues such as fiscal spending and regulation.
Control of Congress was still on hold early Wednesday, with many of the most competitive races still unresolved, leaving it unclear whether Republicans would break the hold of weaker Democrats. Chances for a “red wave” had evaporated, although Republicans remained the favorites to secure a majority in the House of Representatives.
“We are in a somewhat different position and it looks like the Biden presidency hasn’t taken a huge hit this mid-term, so the markets are on hold,” said Danny Hewson of AJ Bell in London.
However, macroeconomic concerns and the Federal Reserve’s monetary policy have been the major forces behind market volatility this year.Capital politics can affect property prices.
If Republicans manage to gain control of the House of Representatives, it would mean a split government with Democrat Joe Biden in the White House, an outcome that has historically been accompanied by positive long-term stock market performance.
analysts of Morgan Stanley He wrote this week that a strong Republican result could allay investor concerns about an inflation-fueled increase in fiscal spending and increase the likelihood that the party will stifle spending through the debt cap. He said this could support the rally in 10-year Treasuries and help stocks extend recent gains.
Stocks have historically tended to outperform under a divided government when a Democrat is in the White House, And investors attribute some of that performance to the political stalemate preventing major policy changes.
Analysts predict a negative reaction from equities if Democrats manage to secure a majority in the House and Senate. And experts at Goldman Sachs said there would be a risk that additional corporate tax hikes would impact profits and a risk that interest rates would be higher to offset potential additional spending.
