It’s been said that gridlock is a feature, not a bug, of the US Constitution, and we may be about to find that out. The election results have left some questions to be resolved, but a few things are coming clear: Democrat Joe Biden is the winner of the Presidential race, but down ballot, the Republicans appear to have made important gains. We’re looking at the prospect of divided government – a Biden Administration with a Republican Senate and a Democratic House with a stronger minority.
According to JPMorgan strategist Marko Kolanovic, this may be the best possible outcome.
“A GOP senate majority should ensure that Trump’s pro-business policies stay intact, and if Biden is confirmed we should be able to expect an easing of the trade war, which should boost global trade and corporate earnings growth,” Kolanovic noted.
With investor fears allayed – that the Democrats would roll back