Former Vice-President Joe Biden appears to be on the cusp of victory in the United States Presidential election, edging ahead in the all-important Electoral College.
But while Biden looks set to snag a win, investor fears over a potential disputed or contested election outcome have heightened, after President Donald Trump’s campaign team cited “irregularities in several Wisconsin counties” and confirmed the President has filed lawsuits in Georgia, Michigan and Pennsylvania to stop vote counting.
CommSec Senior Economist, Ryan Felsman, said the most likely outcome of the election is looking like it will be a Biden presidency, but a divided Congress, with a continuation of a Democratic House and a Republican Senate.
If this is indeed the outcome, it will maintain the current state of gridlock in the US Congress. But, Mr Felsman said US sharemarket investors have seemingly shrugged off the potential for an ongoing divided US Congress and diminished fiscal stimulus to support the US economic recovery.
“On Wednesday, the Dow Jones index closed higher by 368 points or 1.3 per cent after being up 821 points. The S&P500 index finished up by 2.2 per cent – the biggest post-election day gain ever,” he said.