US results augur well for Asian equities
Democrats' planned tax hikes and curbs on some sectors not likely to proceed; US and global interest rates, bond yields set to be lower for longer
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BARRING an unprecedented legal twist, we now know that Democrat Joe Biden will be the next US President. While we do not yet have a definitive outcome for who will control the Senate, our central scenario is that the Republicans will just about hold onto their majority. For investors, this surprise outcome could actually turn out to be good for equities and other risk assets.
The expected "blue wave" scenario, whereby the Democrats were forecast by pre-election polls to control all three branches of government - the White House, Senate and House of Representatives - would have given them a great opportunity to push through with significant policy changes.
Indeed, before the election, sentiment was clearly moving towards this scenario and the focus was on whether the Republicans would use an oddity in the US Senate rules which allows a minority party to slow the legislative process.
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