The much anticipated American polls are now behind us. We still don’t have a clear winner. But, given the fractured nature of the mandate and divided polity left behind by this election, America has more to mend now than before the polls.
Given the new realities, we need to reassess the American state’s responses to stimulus, China, Covid, and the Indian subcontinent. As the global economy struggles to put Covid and its impact behind, American voters have only tossed an additional element of uncertainty into the ring. But markets around the world seem to have taken this into their stride.
The liquidity that drives market is definitely chasing opportunities everywhere. Valuations are certainly not cheap. Yet, markets are still buying into the same subset of stocks. Now, the next set of events must provide markets direction, focus, and decisiveness. Until then, the markets will trade with elevated daily volatility, strong trend-chasing, and endless speculative zeal. The coming weeks should see how global market speculation adapts to the new normal in the US markets and economy.
