by Cho Seulkina
Published 05 Nov.2020 11:21(KST)
[Asia Economy Reporter Seulgina Jo] Jeremy Siegel, a professor at the Wharton School of the University of Pennsylvania and known as a stock market bull, stated on the 4th (local time), the day after the U.S. presidential election, that the scenario where Democratic candidate Joe Biden wins and the Republicans control the Senate is positive for the stock market.
Professor Siegel appeared on the economic media CNBC that day and explained the reasons for the New York stock market's strength after the election, diagnosing it as such. Viewing Biden's chances of winning highly, he evaluated, "If the Republicans hold the Senate, it will block negative factors (for the stock market)." Professor Siegel has maintained an optimistic outlook that the stock market will rise in 2021 regardless of who becomes president ahead of the election.
Professor Siegel judged that the possibility of a so-called Blue Wave, where both the White House and the administration are controlled by the Democrats, has decreased, making the originally proposed tax increases such as corporate tax hikes by Biden less likely. He explained, "The tax increase card has been taken off the table," adding, "Biden's tax increase proposal was a potential negative factor (for the stock market)."
He also analyzed, "It could lead the Republicans and Democrats to compromise on additional stimulus packages and infrastructure spending," and said, "The stock market is looking at that and saying 'It's not that bad.'"
On that day, the New York stock market rose, led by technology stocks such as Facebook (8.3%). The Nasdaq index rose by as much as 3.85%. The Dow Jones Industrial Average (1.34%) and the S&P 500 index (2.2%) also continued their rally following the previous day.
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