Hope for four years of stability after Biden inauguration
Joshua Mahony, Senior Market Analyst at IG, discusses Joe Biden's inauguration and what it means for markets over the next four years..
The pomp and ceremony of inauguration day has come with a similarly chipper outlook from European markets, with traders hoping this marks the beginning of a more stable four years.
European markets are preparing looking forward with optimism this morning, with Joe Biden’s inauguration marking the end of a four-year period that married up both Brexit and global trade uncertainty.
What Biden brings in terms of spending promises have understandably grabbed the headlines, with Janet Yellen perhaps channelling the spirit of Trump to encourage Senate to “act big[ly]”. However, with Trump and Brexit negotiations in the rear-view mirror, markets are faced with a four-year stint of greater stability and less uncertainty.
Four years ago, Donald Trump kicked off his Presidency with a disputed claim of a record attendance, yet with Biden telling supporters to stay at home to avoid the risk of infection, today will be a very different affair.
As is often the way, Joe Biden’s speech will focus on the need for Americans to come together after a divisive election process. However, beyond the political rhetoric, the actions seen in Washington last week highlight a nation more polarised than ever.
The question for markets is just how that political division translates into congress, with Biden hoping that Democrats will vote along party lines to help him push through a raft of grandiose spending packages.
The coronavirus pandemic remains a clear hurdle to overcome, yet the actions taken at both government and central bank level have mitigated a great deal of the suffering that would have come in 2020 otherwise.
With the FTSE 350 gainers being dominated by high-street and service sector names such as Restaurant group, Mitchells & Butlers, and WH Smith, there is a clear feeling that the current suffering provides a buying opportunity for those willing to wait it out until H2.”