It’s Too Early to Feel at Ease| Influencer Forex Analysis•Jasper Lo

The dust has settled on the US election if nothing else, with Biden, the Democratic presidential candidate, securing 279 electoral votes to become the next president. The president-elect thus held two new records: first, to win the election at the grand old age of 77; second, to win the election with a record-breaking 75.55 million votes, beating Obama's record of 69.5 million votes.

When the initial ballot count gave Trump big leads, the US dollar rallied amid the board pressure on US stocks. However, the situation was reversed later, sparking a sharp rebound in stocks at the expense of the greenback. At first, worries about the pressures on stock markets, which would be the result of Bidens significant tax increase after his victory, prevailed financial market. But later, the fact that Republicans remained in a Senate majority boosted stock markets as it was expected that the Senate would not pass such a tax plan.

Nevertheless, there remain some concerns behind the bullish stock markets. The first is Trumps refusal to concede defeat. His campaign has filed lawsuits to prevent final certification of the election results. Second is the battle for Senate control. So far, the tally for the next Senate is 48 Republicans and 48 Democrats, which means Democrats will get a majority in the Senate as long as they win two more seats. Considering the 100 senators in total, if the election leads to a 50-50 party split in the Senate, the President of the Senate, who is also the Vice President of the country, will have a tie-breaking vote. Normally, the Vice President shall have no vote unless the Senate be equally divided. Thus the current Senate elections are in favor of the Democrats. But investors should keep a close eye on the results before feeling at ease.

A chief reason for Biden‘s success is the sharp left turn of his platform, which called for a substantial increase in taxes on high earners and a 100% increase in federal minimum wage from the current $7.25 to $15 an hour. Significant wage increases are bound to pose headaches for business owners and may result in stagflation, which will count heavily against the country’s economy in the long term. Such a tax increase, on the contrary, is expected to dramatically tackle the government deficits, which will put a premium on the dollar. Trumps tax cuts that were enacted after he took office boded well for US stocks at the expense of the greenback, dragging the currency down for a whole year despite the interest rate hike cycle at the time.

Therefore, from a macro point of view, US stocks are likely to see a long correction after the boom, while the dollar may rally on buying support after the correction. In conclusion, investors in the stock market should keep in mind that its too early to feel at ease about the current situation.

[About The Author]

Since 1987, Jasper Lo has been engaged in the financial industry

(forex, futures and gold) for more than 32 years and holds forex R.O.,

securities and futures broker licenses. Mr Lo is an expert in trading

forex, precious metals and commodity futures and an basic and technical

analyst.

Over the years, Mr Lo won many individual and team sales champion

awards, as well as outstanding employee awards. He was invited, as a

guest mentor, to the University of Hong Kong, Guangdong Ocean University

and Guangzhou Jinan University. And he was also appointed as the chief

training consultant by Hantang Securities and Dongguan Securities in

China.

Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:

-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch

-Guest of honor invited by Now Finance Channel - Forex Reports

-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities

-Guest of honor invited by ViuTV - Investor Smarter Group

-Columnist of Finance and Forex Market of Ming Pao

-Presenter of Finance and Forex Forecast of Ming Pao

-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance

-Appointed lecturer of Ming Pao Investment Seminar and Paid Course

-Author of the best seller Investment 36 Stratagem

-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net

-Guest of honor of Open Good Morning of ET Net

-Guest of honor of Metro Finance Channel - Market Opening, Instant

Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market

Analysis

-Guest of honor of New Era of Investment of RTHK

-Columnist of Capital Commodities of Capital Weekly

-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond

-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture

-Guest presenter of Weekly Investment in the World of Enrich Culture