A recap of the past week in 3 short headlines
1. An Election Rebound
After selling off in October, markets quickly rebounded this week after seeing election results. Market indices charged ahead, with the Dow Jones gaining 6.11%, the S&P 500 gaining 6.47%, and the NASDAQ gaining 8.04%. More encouraging economic news has arrived, with the unemployment rate falling 1.0% to a six-month low of 6.9%. The economy appears to be on a slow road to recovery.
Many believe markets reacted positively this week because the expected “Blue Wave” hit a wall, with the Republicans appearing likely to maintain Senate control. Such developments mean “‘any substantial activity on taxes, as well as [new legislation] to control the major tech firms’” would be unlikely to come to fruition, according to chief investment officer Brad McMillan. Moreover, despite many changes due to COVID-19, the election proceeded as normal, with nearly all results coming out by Saturday, certainly calming developments for markets.
2. The Beginning of a COVID-19 Winter
Experts were fearing months ago that COVID-19 would see a strong resurgence in cold winter months, and their predictions appear to be confirmed. In the United States, cases are quickly approaching the 8-digit mark, currently sitting at over 9.8 million.
Internationally, many large nations are struggling as well to contain the pandemic. The United Kingdom was forced to declare another temporary lockdown after cases began exploding. India, Brazil, and Russia lead in case counts behind the U.S., with European nations such as France, Spain, and the U.K. following closely.
3. Biden Declares Victory
Joe Biden has been declared President-Elect, and will become the 46th President of the United States. Biden is expected to have an ambitious policy plan, especially on the economic and fiscal side. Biden is likely to raise taxes on those making more than $400,000 a year, targeting the upper-middle class and above. Moreover, the Biden administration will aim to increase unionization and collective bargaining, seeking to decrease the rising wealth gap in the United States. Finally, the President-Elect has indicated he would like to implement small business stimulus for those hurt by the COVID-19 pandemic.
Advocates have cited a need to address rising inequality in America, while others have pushed back against raising taxes. It remains to be seen what the effect of these policies would be on the overall economy.