111, the United States will hold the midterm elections . Since the results of the midterm elections will determine who can dominate the US Congress among the Democratic and Republican parties in the United States, market investors are highly concerned about this election, especially in areas such as energy and defense.
According to Reuters on November 7, polls and market traders are generally optimistic about the Republican election momentum. Analysts believe that the Republican Party is likely to win control of the U.S. Senate, which means that the Democratic current President Biden 's policy agenda will be hindered.
report pointed out that the government and Congress are in a split, which means a political deadlock and the implementation of major policies will be hindered. However, the investment market believes that such a result will be beneficial to the stock market. In the past, the market often ushered in a period of positive performance regardless of the midterm election results. In the past year, the U.S. S&P 500 index has fallen by nearly 21%, so investors are happy to see the midterm elections.
However, if the U.S. government and Congress fall into partisan rivalry over whether the federal debt ceiling is raised or not, the U.S. will still face the hidden concerns of debt defaulting to .
In view of geopolitical tensions such as Ukrainian conflict , no matter who controls the U.S. Congress, U.S. defense spending is expected to grow. UBS Global Wealth Management analyzed that if the Republicans win, U.S. military spending is likely to "grow sharply"; if the Democrats can still control the two houses or at least control one of them, the growth rate of U.S. military spending will remain within a "moderate" range.
Citi analyst believes that if the Republicans control the two houses, the United States may introduce bills to increase energy production. These bills will benefit oil exploration companies. The outlook for stock for solar and other alternative energy sources is bleaking amid Republican victory. If the Democrats can maintain control over Congress, the bill that favors " Clean Energy " is more likely to gain support.
Citi analysts also pointed out that the attitudes of the two parties towards reforms by tech giants are still unclear. But because the Republicans win the election means the legislative process may stagnate, tech giants will benefit from it.
earlier reported that the Cook Political Report, a non-partisan election forecasting agency in the United States, showed that the agency's forecast of control of the Senate has shifted from Democrats to Republicans because the recent political environment is believed to be more beneficial to Republicans, and the current economic and inflation issues resonate more with voters than abortion.
