The long awaited day has come where after four eventful years have past and a new President has been inaugurated. But what does Biden mean for the markets.
President Joe Biden has not wasted any time in implementing new policies and overturning old ones. Already we have seen the new president rejoin the Paris Climate Accord which Donald Trump withdrew from. He has vowed to also rejoin the World Health Organization,
President Joe Biden promises to rejoin the World Health Organization and the Paris Climate Accord, which Donald Trump was against and withdrew from. Furthermore, he has pledged to sign an executive order to formulate a plan to achieve a 100% clean energy economy and net-zero emissions by 2050. Expect to see American owned companies take a hit by these policies especially manufacturers.
President Biden has been quite vocal about his beliefs on how the coronavirus pandemic has been handled in his country. Describing the role out as a “dismal failure” and vowed to get everyone vaccinated. With such strong words of war during his campaign around the epidemic, his handling of the vaccine and the virus within his first 100 days of presidency as he set a goal of 100 million shots being administered within this time. Should this goal be reached, we shall see a positive swing in the markets as infections rates will be due to plummet we will see the herd rush back to equities and invest in a somewhat return to normality.
There is no doubt Biden intends to push through his stimulus package sooner rather than later. So this is expected within his first 100 days. $1.9 Trillion is what is expected to be put back into the economy with $1,400 going directly into the pockets of the American people. State governments will also receive a stimulus to hep them support their citizens.
How will the markets react to the money? This is a mixed salad bowl as we have in one hand a strong case for a further rise in inflation and a weaker US dollar. But on the other hand we could see a buy up in equities causing markets to rally. However, the one instrument you may want to play is gold. Keep an eye on the yellow metal as much movement is expected in these next 100 days and beyond.