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Here’s what a Joe Biden victory would mean for ASX shares

What would a possible Joe Biden presidency mean for the share market and ASX shares? Here are some areas to watch going forward
The post Here’s what a Joe Biden victory would mean for ASX shares appeared first on Motley Fool Australia. –

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As I’m sure we would all be aware of today, the vote counting for the US elections is still underway and unresolved. Neither incumbent President Donald Trump or his Democratic challenger, former Vice President Joe Biden, has yet been officially declared the winner of this week’s presidential election. Saying that, Joe Biden is on track to receive the most votes in the electoral college by the most recent vote counts. As such, it is looking increasingly likely that he will emerge the winner from this most extraordinary of elections, going off of the latest data.

So, if Mr. Biden does emerge victorious, what will a new president mean for global markets, and, of course, the S&P/ASX 200 Index (ASX: XJO) and ASX shares?

According to reporting in the Australian Financial Review (AFR), Joe Biden’s priorities (assuming he is sworn in as President of course) are likely to be focused on the coronavirus, economic recovery and healing the bitter divisions that will inevitably stem from the close election result.

These are all domestic American issues.

Bidenomics for the ASX?

However, the AFR article also notes that climate change and foreign policy will be secondary priorities for a Biden administration. On climate change, the article notes that Biden has stated that “if we don’t get this right, nothing else matters”.

As such, it expects Biden to quickly rejoin the Paris agreement on climate change and “pressure other countries to do more. Australia will be among them.”

That may indicate that a Biden presidency might not be too kind to fossil fuel extractors like BHP Group Ltd (ASX: BHP) and Woodside Petroleum Ltd (ASX: WPL).

The article also notes that a Biden administration’s foreign policy may seek greater engagement with China. It’s no secret that Sino-US relations under President Trump have deteriorated amid trade wars and tariff implementation.

The present relationship Australia has with China is also showing signs of being shaky. Just this week, China announced fresh import restrictions on some Australian goods, after flagging wine importation restrictions earlier in the year.

Although the AFR notes that “China will continue to be a central strategic and economic competitor” to the US, it also expects more “direct hard talking” between Washington and Beijing.

If this relationship thaws, we could see a concurrent thawing of our own relationship with China. This could be good news for ASX shares like Treasury Wine Estates Ltd (ASX: TWE) and other Australian companies exporting to China.

All in all, the article posits that a Biden presidency could bring modest changes in the economic sphere, but a dramatic change in the global diplomatic order. It will be interesting to see how these changes play out for Australia and the ASX.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here’s what a Joe Biden victory would mean for ASX shares appeared first on Motley Fool Australia.

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