Stock Market Under Biden Is All Set For A Fresh And Faster Start Compared To Trump’s

The day after the Trump administration formally accepted the election of Jo Biden, investors were relieved by pushing the two major stock market indices to full-time records on Tuesday. It was a farewell party of sorts for Mr. Biden, but what investors really welcomed was the end of the fluctuations and volatility they faced under the previous trump administration. President-elect Biden has promised to press for more stimulus to boost the economy. His appointment as Secretary of the Treasury, Janet L. Yellen, has since become well recognized as Federal Secretary of State. It might be very early but the situation seems to be the complete opposite of what the Trump administration had predicted, a market crash. And in recent times after the news about the election has gradually increased, mainly due to the optimism given by progress in the development of a vaccine. Companies such as Pfizer, Moderna, and AstraZeneca have all confirmed that their vaccine candidates showed little to no symptoms in the trials. Indian companies such as Serum Institute have claimed that they are reaching the final stage of development. Since the election, the S&P 500 index has increased by approximately 8%. Some investors claim that with Mr. Biden in the White House and the Republicans likely to maintain control of the Senate, they could rely on a political gridlock to stop tax increases that could break the markets.

Skeptics feel the need to point out that the relationship between presidents and stock performance is tenuous, that stocks typically go up, and that Trump’s S&P 500 record was very close to his predecessor, Barack Obama. All these things are true, but none of them stopped him from saying to Biden, “If he’s elected, the stock market is going to crash,” in front of 60 million viewers. The last four years have also been a turbulent time for markets, with several sharp, unexpected downturns frequently related to policies implemented by Trump, such as his trade war with China, which helped to drive stocks to a 6% loss in 2018.

This year the more than 11-year-old bull market crashed in March, with the S&P 500 crashing almost 34% in a matter of weeks as the epidemic raged across the globe, before finally rising to new heights. And those on Wall Street who may have endorsed some of the president’s proposals have frequently said they could do without his daily Twitter musings on the markets. To be honest, Joe Biden has been the recipient of some unforeseen tailwinds, particularly the data reporting optimistically about the covid vaccines developed by various companies. In the meantime, he’s getting no help from estimations which at 22 times forward earnings and 2.7 times sales are some of the highest multiples ever recorded let alone just for a newly elected president. “This combination of political relief and positive health-care surprises really surprised the stock market in a good way,” said Wayne Wicker, Chief Investment Officer at Vantagepoint Investment Advisers. “At the end of the month, people were really worried about the presidential election. I don’t think anyone was betting on such a blockbuster month.”


Ashutosh Gupta

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