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Prior to November’s Presidential election, we discussed three possible outcomes and some of the potential investment implications of each scenario.
Having won both seats in Georgia’s Senate run-off elections, the Democrats have now gained control of both the White House and Congress (via the vice-presidency tiebreaker) – giving them a stronger platform for the legislative action necessary to implement their agenda for government.

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Interest rates – gradual lift likely
Long-term bond yields continued to creep gradually higher in December as the prospect of further significant near-term monetary stimulus eased in line with an improving global economic outlook. U.S. 10-year government bond yields ended the month at 0.92%, and Australian 10-year rates at 0.97% –

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The Reserve Bank of Australia’s (RBA’s) pledge to keep interest rates on hold until inflation is sustainably back within its 2 to 3% target band could be tested over the next year with a potentially large rebound in house prices.
As seen in the chart below,

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Key global market trends – stock rebound!
After two months of consolidation, global equities powered ahead in November, reflecting positive COVID-19 vaccine news and a seemingly clear winner of the U.S. Presidential election. The gains came despite rising COVID-19 cases in both Europe and the United States and the re-imposition of some social distancing restrictions.

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On 6 October 2020, Treasurer Josh Frydenberg released Australia’s 2020-21 Federal Budget.
The objective of this Budget is pretty simple – economic recovery – by increased spending, lower taxes, job training and re-skilling workers.
A stimulatory Federal Budget on a standalone basis is beneficial for the sharemarket.

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Although still subject to some legal disputation, markets so far have confidently concluded that Democrat Joe Biden will be the next U.S. President. This note assesses the current U.S. political situation and the potential investment implications of a Biden presidency.
Why a re-run of the 2000 contested election is unlikely
Despite long-feared legal challenges from President Trump,

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Key global trends – equities drop further
Global equities eased back for the second month in a row in October as rising COVID-19 cases in Europe and the United States, concern over the lack of new U.S. fiscal stimulus and Presidential election jitters took their toll. Although overall global bond yields –

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With the U.S. Presidential election now less than a week away, many investors are currently considering how the potential result could impact their portfolios. While, as our Chief Economist David Bassanese noted in his U.S. Presidential election preview, markets ultimately learn to live with whomever the U.S.

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Chatting to advisers and investors on a daily basis, a question I frequently get asked is: “Where is the money going in ETF-land?”
Given the volatility and uncertainty we have seen in the markets this year, it was interesting to pull the Year to Date (1 Jan 2020 to 30 Sep 2020) flows from the ASX.

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Key global trends – equities finally pull back
Global equities had their first monthly negative return since bottoming in March, reflecting a shakeout in the high-flying U.S. technology sector. Despite the risk-off equity sentiment, gold prices also fell back (and commodities more generally), which likely reflected a rebound in the ‘safe-haven’

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