A Biden administration will probably need Republican support for a major stimulus package because it is highly likely that the Republicans will control the Senate. However, after running up the biggest budget deficit in history under Donald Trump, the Senate would probably hold back the kind of multi-trillion dollar spending that could usher in a Biden Boom.
Mr Biden’s proposed policies are indeed a step in the right direction. With policies to raise the corporate tax rate from 21 to 28 per cent and penalise corporations that ship jobs overseas, his long-term view is to bring down the US deficit which currently stands at US$3.13 trillion in fiscal year 2020 – its highest level since just after the Second World War.
Now, the reality is that a change in presidency was priced into the equity markets weeks before the election. This is the reason markets started moving upwards once a Biden win was clear. Hence, I see overall business sentiment heading upwards as we move closer to Inauguration Day on 20 Jan 2021.
Mario Singh
Chief Executive Officer
Fullerton Markets
