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What does the election result mean for the second stimulus package? – CBS New York

(CBS Detroit) — Election Day is over, and the country is still waiting to see if Donald Trump or Joe Biden will become president for the next four years. As of Wednesday afternoon, several fierce battle states remained too close to make a call.

Despite uncertainty, the stock market is reacting positively again. The Dow Jones rose more than 700 points early Wednesday afternoon. The S & P 500 and the more technology-oriented NASDAQ also showed significant gains in early trading. All three finished the day.

What does this stock market reaction mean in the light of the 2020 elections?

Investors like certainty. But despite this truth, they are pushing up stocks. If the uncertainty is too long, the situation can change. That’s a possible scenario, as so many Americans are voting early.

Investors are afraid of the protracted and contested sorting process that adds uncertainty to the market in these already uncertain times. Election competition, which is considered the worst scenario, can lead to rapid market volatility.

>> Details: Stimulation package update: What would happen to the economy without a second stimulus?

The contested elections are still a clear possibility. Trump has already claimed victory in several major states where votes continue to count and the race is too close to call. He also said he would bring the election to the Supreme Court and tweeted, “We’re getting bigger, but they’re trying to steal the election …”. Twitter has flagged the tweet as misleading.

Another aspect of the positive reaction in the stock market is the situation of the second stimulus. Elections can help determine when such a package will pass and what it will look like.

If Biden wins and the Democrats take over the Senate, the second stimulus will probably be even greater. Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin have recently been negotiating packages ranging from $ 1.8 trillion to $ 2.2 trillion. This includes a second stimulus check and an additional weekly unemployment allowance from the federal government. Pelosi’s framework evolved from the $ 3 trillion Heroes Act passed by the House of Representatives in May, but the Senate did not take it up before the election. Pelosi recently said that if Biden wins, he “wants to be as clean as possible in January.”

>> Read: Market strategists warn that “the pain felt on the main street is quite different from what is reflected in the stock market.”

If Trump wins and the Senate remains in the Republican hands, the stimulus will be even smaller. The Senate’s recent stimulus attempts reached $ 500 billion and did not include stimulus checks. A few weeks ago, a majority of filibusters were unable to pass the Senate. Trump favored a larger package before the election and recently promised a “tremendous stimulus package right after the election.”

Each of these scenarios assumes that the House of Representatives is under the control of the Democratic Party. However, in theory, the House of Representatives could turn into a Republican Party, as all representatives would be reelected. But that’s unlikely. And as of Wednesday afternoon, the House of Representatives appeared destined to remain under Democratic control.

Similarly, the Senate is likely to remain under Republican control, with Susan Collins in Maine winning the reelection, and only five winners have yet to be identified.

>> Details:’In order to influence the election,’ the stimulus package would have had to go through in July and August,’ Pundit says.

The outcome of the election will determine when the second stimulus will be revisited. It could be a lame duck session from November 4th to January 3rd, or after taking office on January 20th. However, Pelosi and Senate leader Mitch McConnell recently added additional federal aid, perhaps in the new year.

The end of an election can mean at least the end of political stance, or at least a dial-down. Politics seemed to impede the actual progress of stimulus negotiations. The two parties may be willing to trade, knowing the balance of power, although the president’s control and the two parliamentary homes are shaking.

What does the election result mean for the second stimulus package? – CBS New York

Source link What does the election result mean for the second stimulus package? – CBS New York

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