Why the Stock Market is at an All Time High... Again?!

Economics Explained

In the fallout of one of the most volatile American elections ever financial markets did something very strange, they rose, and rose to new record levels, again.

This would be unusual during even a normal election, where most investors tend to sit back and wait for the dust to settle but it is especially strange in 2020.

Joe Biden, who everybody is at least 90% confident will be the next president has spoken very openly about plans to raise corporate tax rates and this is coming in conjunction with the tension around how a transition of power may or may not take place, not to mention that global pandemic.

If investors are supposed to fear uncertainty surely they would be terrified of the current world that we live in.

Logic would dictate that the best outcome for the major corporations that make up financial markets would have been a nice simple and decisive Republican victory. At the end of the day, they tend to be a slightly more pro-business party.

Instead what they got was an extremely contentious Democratic victory with the potential to bring turbulence around key issues like covid relief packages in the coming month.

So what is going on here?

• Why have markets rallied so hard in spite of this turbulence
• Will this market boom reverse if the proposed policies of the Biden's campaign are rolled out.
• And could it just be that investors no longer favored trump as president?

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