Three days after Election Day and America still does not know the name of the next President. Will Trump win a second term? Or will Biden bring a Democrat White House?
Votes are still counted, and not only the United States watches, but the entire international community. Because of its active role in foreign affairs, America’s new leadership for the next four years is an important consideration in many parts of the world.
So far, the stock market likes the uncertainty. It leans towards a Biden White House and a Republican Senate. Curiously enough, this is a bullish outcome for tech stocks and not only. The DC “jam” will likely postpone antitrust lawsuits (a concern for major tech companies) as well as a tax raise proposed in the case of a “blue wave” outcome.
However, no matter who wins, America faces some serious economic problems it needs to solve. For its sake, and for the world’s sake too, the sooner the elections saga ends, the better.
Rebuilding the Economy
Not only the United States, but the world’s economy is in desperate need of solutions. Work needs to be done to repair it, and where to start best if not with the world’s largest economy?
There is already talk about the upcoming “dark winter”. Remember that winter comes a bit later in the United States than in Europe, and we may see something similar in terms of the second COVID-19 wave.
At the same time, the country faces enormous unemployment. Despite the relatively “contained” unemployment rate, millions of Americans live under an unemployment benefits program. About four million face an expiration, and they will put pressure on the unemployment rate.
Later today, we will have the NFP report for October. As it was the case in this crisis, the focus sits with permanent job losses. If there is no reversal in that trend, any positives of the report should be discounted.
According to a recent study, 40% of restaurants and 66% of hotels face closure in the period ahead. All the Fed can do is to lend, but faced with lack of demand, businesses are reluctant to add to their short/medium, or even long-term debt. Moreover, one million travel jobs are at risk.
Finally, one month from now, on December 11th, the Government is projected to shut down. In other words, elections are just a distraction from the main problems that need to be solved, no matter who is declared a winner.