The Republican victory in the Senate will play a major part in boosting U.S. equities until April, forecasts a leading global analyst at one of the world’s largest independent financial advisory organisations.
Tom Elliott, the International Investment Strategist at deVere Group, which has $10bn under advice and management, comments after the Republican takeover of the Senate.
He notes: “With the U.S. economy already amongst the fastest growing in the developed world, the Republican victory in the mid-term elections will give another reason for investors to buy U.S. equities.
“The Republicans appear to want to focus on pushing through stalled trade deals; repealing large parts of the Dodd-Frank banking legislation, which should help ease the problem of weak liquidity in financial markets; and making it easier for U.S. energy companies to gain permits for new activities and acquire export licences.
He continues: “The rest of the world should see spill-over effects. A near-term rally in U.S. markets will support global stock markets, and as more business-friendly legislation is passed through congress a more competitive and profitable U.S. will in turn demand more imports from its trading partners.
“We can also expect the U.S. dollar to continue to rally.”