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Specific sectors of the economy, such as technology firms that have thrived during the pandemic, may also benefit.
“We expect tech companies, the quality factor and large caps to perform strongly under a divided government — as they have done in the past,” a report from U.S. investment-manager BlackRock Inc. said.
Another winner could be the cannabis industry. Voters in New Jersey, Arizona, Mississippi, Montana, and South Dakota approved legalization initiatives last night, analysts at Beacon Securities noted, although a blessing from the U.S. federal government might be a stretch.
“While the federal races are still TBD, the state-level results look very promising for the cannabis industry,” the Beacon analysts wrote. “In our view, control of Congress is more important than the White House, as far as cannabis reform is concerned.”
Even legislative gridlock could come as a relief to Canadian companies sweating a possible tax hike on their U.S. operations under a Biden presidency.
In the same vein, though, firms looking to cash in on billions in government infrastructure spending or green-energy initiatives may have to make other plans.
“Should Former Vice President Biden win the Presidency, a Republican Senate would make it unlikely that the new administration would be able to fully enact its economic policy priorities including ambitious infrastructure spending and individual and corporate tax increases,” economists at U.S. bank Citigroup Inc. wrote in a note on Wednesday.