December 4, 2020

This is how markets will change with Joe Biden as president of the United States


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New winds blow in the world economy with the proclamation of the democrat Joe biden as the new president of the United States. Because it is a fact: political events have more and more weight in the markets and a change of name and party in the world’s leading power inevitably leads to a shift towards other ports.

In the first place, because with Biden at the helm the strongest economy on the planet is going to undergo a profound tax reform that will include a rise in taxes on large companies. A factor that will reduce competitiveness in a scenario where China it is more on the lookout than ever to lead the world economy. In addition, under his command they also plan new tributes to investments and great fortunes.

From IG Markets they estimate that the Biden legislature will be marked by a “more protectionist regulation, but less focused on protectionism with the consequent removal of tariffs.” On the other hand, they also foresee a lower military expenses and greater public investment in infrastructure, in addition to carrying out the decarbonization of the US energy grid.

Something that Borja Ribera, professor of the EAE Business School and financial analyst at Gaesco, who assures that the best thing for the US at the moment is to carry out a stimulation of the economy “through taxes and put more money in circulation. This will help cyclical stocks like infrastructure or startups »

On the latter, entering the stock markets, the analyst of IG Sergio Ávila points out that the major beneficiaries will be the infrastructure, solar energy and pharmaceutical sectors, since Biden “is in favor of social security and universal health insurance, which will increase the demand for medicines.” Ávila predicts that short term This will be good for the markets, but in the long run “increased debt and higher taxes will be counterproductive for the economy.”

And the Ibex?

IG experts point out that since 2016 the ECB he lowered interest rates to 0% “the banking sector was burdened and has set a negative trend in the Spanish market”, so that in recent years they have not been able to take advantage of the strong rises in the US markets.

Even so, they estimate that the sectors most benefited will be in tune with those most favored by Biden in the United States. In this way they point to energy companies within the Ibex Iberdrola, Actuate Y Siemens Gamesa as an interesting option to invest due to the greater public investment that Biden will make in the US. In the same way, increases are expected for construction companies ACS Y Ferrovial, with great presence in the US market.

In this line, Viscofan and Inditex, also very involved in the North American market, they will come out winners for “the political change of aránceles”. Regarding the pharmaceutical sector, IG emphasizes Grifols as the most graceful for the return to “ObamaCare” policies.

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