Vice President-elect Kamala Harris
Joe Biden is set to become the 46th President of the United States denying incumbent Donald Trump a second term in office. Biden’s path to victory was led through three states Trump narrowly won in 2016: Pennsylvania, Michigan and Wisconsin. Biden also holds a slim lead in Georgia, which is headed for a recount. Trump captured several large battleground states that Biden had hoped to be competitive in, including Florida, Ohio and Texas.
Kamala Harris, the 56-year-old California senator, will become the first black woman to become Vice-President of the United States.
The election of Biden and Harris is historic in more than one way. At 78, Biden will be the oldest man to ever occupy the Oval Office and only the second Catholic. Harris will be the first woman and the first Black American and Asian American to serve as vice president.
President Trump has not conceded the race. His campaign has launched lawsuits in several states in an attempt to delay the counting of votes it considers to be disputed, but this litigation has thus far been unsuccessful. The president spent part of his Saturday golfing at his club in Virginia.
Leaders from around the world congratulated President-elect Joe Biden and Vice President-elect Kamala Harris on their victory in the closely contested US presidential elections.
The control of the Senate remains in the balance but is favouring the Republicans while the House of Representatives will likely remain Democratic. Financial markets seem to favour a divided congress that potentially reduces the likelihood of immediate tax hikes and increased regulations, while not removing the potential for a stimulus agreement on some form of fiscal-aid package.
Friday’s jobs report showed the U.S. economy added 638,000 new jobs in October, pushing the unemployment rate down to 6.9%. The economy has recouped just over half of the 22 million jobs lost when the unemployment rate peaked at 14.7% in April as 11.2 million workers have returned to payrolls.
The S&P 500 (+7.32%), Dow Jones Industrial Average (+6.87%) and Nasdaq Composite (+9.01%) all posted their biggest weekly gains since early April. European markets also rallied strongly over the week with the pan-European STOXX 50 Index ending 8.31% higher, while the UK’s FTSE 100 Index advanced 5.97%.
Japanese stocks also ended the week sharply higher (+5.87%) on the back of renewed investor optimism around Japanese corporate earnings, while Chinese stocks advanced as the prospect of a Biden presidency raised the outlook for improved U.S.-China relations. The benchmark Shanghai Composite Index gaining 2.7% over the week.
Market Moves of the Week
Emerging market equities and currencies had one of their strongest weekly gains since early April with the JSE All Share Index ending the week up 9.1%, led higher with gains in all the major sectors. Industrials gained 9.71%, resources 9.09% and financials 7.27%.
The rand, which weakened up to R16.40 to the dollar earlier in the week, traded right down to R15.60 at the close on Friday. A Biden presidency is expected to favour emerging markets and provide for a more stable global environment.
In company news Chinese retail giant Alibaba and Richemont have agreed to invest $1.1 billion in luxury boutique platform Farfetch Ltd. as part of the U.K. company’s expansion into China. Farfetch, will be able to expand its reach to Alibaba’s 757-million consumers. Farfetch’s sales have boomed during the pandemic, rising 74% in the second quarter as shoppers blocked from brick-and-mortar stores went online. China’s luxury market is rapidly growing and is expected to account for half of global luxury sales by 2025, Alibaba’s Chief Executive Officer Daniel Zhang said in the statement.
Chart of the Week
Joe Biden has defeated Donald Trump to become the 46th U.S. president. Biden’s victory came after the Associated Press, CNN and NBC showed him winning Pennsylvania and Nevada. Biden won 290 Electoral College votes, according to the AP, which earlier had called Arizona for the Democrat. Voter turnout was especially high in many battleground states, where expectations of a close contest appeared to boost voter participation.
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