It’s often said that US elections are about the economy. As Joe Biden goes through the transition process, investors will be asking what his presidency will mean for the markets.
Even the pandemic has not derailed the market, but it remains to be seen if the historic gains of the last four years will continue next year, as Biden has pledged to tighten controls on the technology companies. However, his more stable approach to leadership could have a calming effect, especially if he embraces a more coherent foreign policy agenda.
While the technology sector might feel nervous about a Biden administration, renewables could well continue their recent outperformance. A green new deal, while disclaimed by Biden, has been promoted by some Democrats.
There are even some corners of technology that may continue to grow, such as gaming. With two new consoles launching in November—Microsoft’s Xbox Series X and Sony’s PS5—expectations are running high. Top gaming companies such as Take-Two Interactive, Activision Blizzard and Electronic Arts will also likely see an increase in their stocks in 2021. While Nintendo lags the market leaders and doesn’t have a new console scheduled, analysts see the stock as significantly undervalued.
The pandemic has also spurred interest in certain technology sectors, such as biotechnology. The potential for these companies to transform healthcare is as exciting as any other technological breakthrough, and even more so in the wake of Covid-19. In a world of social distancing, contactless payments are another strong pick, led by Square and PayPal, which have seen strong gains already this year.