Our distinguished group of speakers forecast what may be in store for business, technology, and what politics may cause, in the wake of one of the most consequential elections in recent history.
Now this update, based on results from the Georgia runoff election, Democratic control of the senate appears more likely. here is how this may impact markets:
- More fiscal spending may be more likely: passing infrastructure spending and delivering more COVID-19 relief via budget reconciliation. If they are successful, this could be good for the growth impulse (both in the U.S. and globally), which is good for equities, but likely to push nominal interest rates and inflation expectations higher.
- Some taxes may increase to help fund expanded government spending. The corporate tax rate may increase, and treatment of capital gains and dividends may change as well, but likely won’t enter the conversation until late 2021 or 2022. This could be a slight headwind for corporate after-tax profits, but probably not significant enough to offset the positive impact from more government spending.
- More stringent regulation is possible. Big Tech is already being scrutinized by the FTC and DOJ. Traditional Energy companies may face targeted regulation around taxes, drilling, and tighter emissions standards. Drug price controls are also more likely. Tech regulation has been on investors’ radar for a while now, Clean Energy is increasingly gaining favor over Traditional Energy, and the conversation on drug price controls has been a topic for years.