Invest
The US election created a ‘goldilocks scenario’ for financial markets
As the votes continue and the results are collated, the US election is increasingly likely to create a “goldilocks scenario”, an industry expert has said.

The US election created a ‘goldilocks scenario’ for financial markets
As the votes continue and the results are collated, the US election is increasingly likely to create a “goldilocks scenario”, an industry expert has said.

T. Rowe Price’s head of Australian equities and portfolio manager, Randal Jenneke, said that if Biden wins with the Republicans controlling the Senate, it would create a goldilocks scenario where tax changes that could hurt company profits do not occur while the Fed provides support for markets.
“The market over recent weeks appeared to be positioning for a ‘Blue Wave’, which carried the prospect of a much larger stimulus package which could have exceeded US$5 trillion,” Mr Jenneke said.
“With a Blue Wave scenario all but removed, it is very unlikely Democrats will be able to raise US corporate and income taxes for higher-income earners and pursue the more controversial aspects of their progressive agenda.”
With a split congress, T. Rowe Price expects a split congress would result in lower stimulus and continued outperformance of growth.
“Ultimately this means more of the same,” Mr Jenneke said.
“A divided government will constrain stimulus and tax hikes; we expect this to continue to favour growth stocks and the market heavily traded this way overnight with the NASDAQ rising close to 4 per cent and traditional growth sectors of healthcare, IT, consumer discretionary all rising.”
About the author

About the author


Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more

Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more

Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more

Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more

Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more

Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more

Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more

Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more

Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more

Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more

Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more

Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more

Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more

Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more

Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more

Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more