Securing Corporate Predictability with Biden's Victory... Market Eyes Focused on the Senate

"Unpredictable" Biden's Traditional and Stable Management Over Trump
"Corporate Management Will Become Easier"... Anxious About Additional Stimulus
Senate Majority Decides in Georgia... Difficult Passage if Republicans Win

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] After a fierce contest in the U.S. presidential election, Democratic candidate Joe Biden secured victory, reassuring business leaders that uncertainty has been removed for the time being. However, since the large-scale economic stimulus package strongly advocated by the Biden administration must pass through Congress to be implemented, the market remains cautious about future prospects.

According to the Wall Street Journal (WSJ) and others on the 8th (local time), U.S. business leaders assessed that operational confusion would decrease with Biden's election victory. Since the incumbent President Donald Trump was highly "unpredictable," it is expected that relatively stable management strategies will become possible. Unlike President Trump, who during his four years in office often announced economic policies, including trade, abruptly via Twitter, Biden is expected to engage with businesses in a relatively quiet and traditional manner.

Christopher Stanton, Chief Investment Officer (CIO) of Sunrise Capital, said, "Biden is good news for the market. We are completely exhausted from being swayed by Trump's tweets." Peter Anthony, CEO of UGN, an auto parts supplier, said, "It will be more stable going forward, so (business management) will become somewhat easier."

Entrepreneurs believe that the wounds from the divisive election this year will remain in American society and the economy for some time. Accordingly, they expect that Biden will need to focus on healing these wounds during the first few months of his term. In particular, business leaders emphasized the need for a stable transfer of power amid President Trump's refusal to concede. James Dimon, CEO of JP Morgan, said, "Now is the time for unity," adding, "As has been the case in every election, we must respect the results of the U.S. presidential election and the decisions of voters and ensure a peaceful transfer of power." Billionaire hedge fund manager Bill Ackman also tweeted, "It's time to pack up the tent after the battle," writing, "Think about what is best for your legacy and this country. Gracefully acknowledge it and call for unity among all who supported you."

However, business leaders remain anxious about whether additional stimulus measures to support the economy, which has been weakened by the novel coronavirus disease (COVID-19), will be implemented. Since stimulus implementation requires legislation to pass through Congress, attention must also be paid to the political landscape in the Senate.

Considering the current vote count trends, the majority party in the Senate between the Democrats and Republicans is likely to be decided in Georgia. Major foreign media reported, "Attention is focused on the Georgia Senate vote count." With the Republicans and Democrats each holding 48 seats out of the total 100, the ongoing counts in North Carolina and Alaska show Republican leads. The two Senate seats in Georgia remain uncertain. The party that will control the Senate will be determined by the runoff election scheduled for January next year.

If the Republicans secure control of the Senate as the current trend suggests, it is expected that short-term agreement on the size of the stimulus package will be difficult due to differences between the Democrats and Republicans. Michael Pah, CEO of investment advisory firm Palmer & Washington, said, "The market is saying that the results of the congressional elections are more important than the presidential election results."

In the mid to long term, there is growing expectation that a Republican-controlled Senate could block Biden's tax increase pledges. Foreign media also noted that the rapid rise in the stock market after the U.S. election on the 3rd was for this reason. WSJ reported, "Some corporate CEOs viewed the Republican majority in Congress as a sign that they do not want President Trump's pro-business policies to change abruptly."

This content was produced with the assistance of AI translation services.