Election 2020 is Still Undecided

A record number of people voted in the 2020 U.S. presidential election, and several media outlets have projected that former Vice President Joe Biden has won enough electoral college votes to be declared President-elect. However, President Donald Trump has not yet conceded the race and is pursuing legal options in several states challenging the outcome. States now have until December 8to resolve ay election disputes, including recounts and court proceedings, as electors officially cast their votes on December 14.

As this process continues to play itself out, we believe that 2021 will bring an economy that is improving nicely. Based on gross domestic product, the U.S. economy grew by a record 33% annualized in the third quarter as the economy reopened (Bureau of Economic Analysis), likely bringing the U.S. recession – one of the shortest ever – to an end.

The strength of the U.S. consumer has been a key driver of this recovery, with retail sales already eclipsing their pre-pandemic highs. It’s not just the consumer driving the rebound though. Manufacturing activity has been on the upswing; investment in technology has surged; most housing markets across the country are booming; company results during third quarter earnings season have been much better than expected; and S&P 500 Index earnings are expected to increase significantly in 2021 – potentially by more than 20% (FactSet).

Meanwhile, COVID-19 remains a threat as cases and hospitalizations continue to rise. Although the numbers may go higher in the short run, cases are skewing younger and treatments have improved significantly, greatly improving patient outcomes. While widespread shutdowns are unlikely, renewed restrictions in Europe in response to its latest outbreak provide a reminder that this battle is not yet over. We remain optimistic that safe and effective vaccines continue to be identified by year end and become widely available in early to mid 2021.

Turning to policy, negotiating a stimulus package to help fortify the economic bridge to a COVID-19 vaccine will likely be among the first priorities, though a smaller package in the lame duck session of Congress may be possible.

While political uncertainty may cause market volatility, U.S. political and economic systems are resilient and can, after a period of adjustment, adapt to new realities. Most of our investment horizons extend far beyond this election and any political cycle. Our focus remains on providing independent investment advice and helping you stick to your long-term investment strategies. Our commitment to you will not change, regardless of who is in office.

Please continue to take care of yourselves and reach out to us with any questions or concerns.

Thank you for reading,

Benchmark Wealth Management