The 5 scenarios that everyone is talking about

2. Fiscal expansion could be the outcome if we see a party gaining the full control, i.e. White House, Senate and House of representatives. However, this is an extremely impossible scenario as a limited control of Congress is expected to be gained. Hence this suggest that the legislative power would be restricted to those preferred by consensus within the controlling party.

3. The election will act as a catalyst for the economy as a whole but also per sector, since voting is expected to be determined by what kind of fiscal stimulus  could be used in the years ahead 2021 to mitigate pandemic economic corruption. Biden’s more progressive over Trump’s  policy platform. The reality of Biden’s policy proposals stands in sharp contrast to a campaign that has positioned him as a centrist Democrat. His platform reflects the triumph of the progressive left and could mark a substantial increase in the size and scope of the federal government.

4. Investors may misread the “Blue Wave.” The odds of a possible democratic unified governments are top in forecasts .Hence market could be seen pricing in this scenario. According to Morgan Stanley Research team, those who see a Biden win as bullish could be disappointed if market rallies in consumer staples and machinery stocks stall on a China policy that could wind up relatively unchanged. On the macro side, a Democratic sweep may result in demand-side stimulus policy, which could have a meaningful multiplier effect for economic growth.

5. Geopolitics could persist with tension between the US and China rising. Taking into consideration the stance of both candidates in regards to trade relationship with China, Biden win doesn’t represent a substantial adjustment to US-China policy.