U.S. stocks have rallied recently despite the ongoing uncertainty over whether Donald Trump or Joe Biden will win the 2020 presidential election.
According to CNN Business, Wall Street was facing a difficult period earlier in the week as the unpredictability of counting votes in key battlegrounds could have taken days or weeks, which subsequently affected activity in the market. However, as a Biden victory begins to look more likely, stocks have recovered.
Paul Donovan, the chief economist at UBS Global Wealth Management, explained.
“You’re not going to have an extreme disruption in the wake of the results.”
Traders on Wall Street are expecting order to resume soon with the Democrats closing in on a victory. Stocks showed growth in premarket trading, with the Dow increasing 1.3 percent and the S&P 500 rising 2.2 percent.
Donovan believes the market fluctuated as a result of premature claims about victory in the election.
“As far as the markets are concerned… there is a difference between a contested election with no winner being declared by the news networks and a contested election where the news networks have declared a winner,” he explained.
The Associated Press shows that Biden needs six more votes from the Electoral College to reach the 270 required t0 become president. Trump has 214, needing 56 votes more to stay in the White House. Nevada, Pennsylvania, North Carolina and Georgia have not confirmed the outcome of their state’s election yet.
Wall Street reportedly backed a “blue wave” initially, where the Democrats would control the Senate. However, due to the unexpected performance of the Republicans in the election, investors are backing them to keep their majority.
In response to the developing outcome of the 2020 election, John Normand, JPMorgan’s head of cross-asset strategy, shared his thoughts on the situation relating to the stock market.
“The status so far: unclear on the next president but fairly clear that he’ll face Congressional resistance on anything transformational, whether on the budgetary or regulatory front. That is great news for those who think that government inaction is generally good for asset prices over the medium term,” he wrote in a note addressed to clients of the company.
The presidential election has had a big impact on economics in the U.S. The Inquisitr recently reported on the prediction of Mad Money host Jim Cramer in the lead up to the election, who felt the weeks surrounding it would create confusion and volatility in U.S. markets.