SMM: according to the results of the US election, we believe that although Congress continues to present a bipartisan rivalry, after Biden takes office, he will be able to lead the efforts to prevent and control the epidemic, the power to say in fiscal stimulus will also be stronger, and the repair of the US economy will be better than the status quo. At present, nominal yields on US bonds are low, and with the control of the epidemic and the investment of Biden's economic stimulus, the economy will gradually come out of recession and yields will begin to rebound. From an inflation point of view, the current inflation expectation in the United States has reached 1.73%, which has returned to the level before the epidemic, and the range of marginal repair tends to be smaller. Real yields on US bonds will rebound slowly over a long period of time, and gold prices will also be under some pressure.
As of November 9, Democratic presidential candidate Joe Biden won 279 electoral votes, taking the lead in winning the general election by more than 270 votes. Several key states are still in the process of counting votes, but Pennsylvania's Biden count surpassed Trump's, leaving only Arizona, North Carolina, Georgia and Alaska with a total of 45 electoral votes. But judging from the current situation, Trump can no longer change the overall situation.
Trump said he would appeal and seek legal means to demand a recount. But we believe that a recount and a Trump turnaround are no longer possible. There are two reasons: one is that mainstream media such as Associated Press (AP), Washington Post, New York Times, NBC, CBS and Fox News have all announced that Biden has won the election and will become the new president of the United States. The mainstream media in the United States are often authoritative, indicating that the mainstream media have also recognized the results of the election, including Fox News, who is close to Trump, who also gave up resistance and announced that Biden was elected. The second is that state laws have some basic requirements for a recount in the general election. For example, Pennsylvania requires a recount if the gap is less than 0.5%, and Georgia can apply for a recount if the gap is less than 0.5%. The current results also do not meet the legal requirements of counting votes from the new.
Therefore, on the whole, the election of Biden as president is a foregone conclusion, and the market for the precious metals market will gradually switch to the impact on the market after the election of Biden.
After the new President Joe Biden takes office, he needs to pay attention to the control of the epidemic and the strength of fiscal stimulus. We believe that the economy as a whole will be conducive to repair, nominal yields on US bonds will begin to rebound, the extent of further inflation repair tends to be smaller, and long-term gold prices will come under pressure.
New President Joe Biden's epidemic control will be better than Trump's. At present, the United States is suffering from the third wave of the epidemic, with more than 100000 new confirmed cases that day, exceeding the peak of the second wave of the epidemic. Seven states, including Arkansas, Louisiana, North Carolina and Alabama, have suspended resuming work. Biden has repeatedly said that after taking office, he will step up efforts to control the epidemic, expand the scope of testing and call on people to wear masks, and will develop a vaccine as soon as possible. It can be predicted that epidemic prevention and control in the United States will become more optimistic and have less negative impact on the economy.
In terms of fiscal stimulus, the amount of stimulus proposed by the Democratic Party is even higher, and the Federal Reserve has also indicated that it is willing to use the corresponding monetary policy. Prior to the second round of relief package proposed by the Democratic Party, the two parties have been deadlocked over the amount of money, which has been delayed until the presidential election from June to the presidential election. Biden is expected to quickly agree on bipartisan infrastructure investment, but there are likely to be differences in other areas. We think Biden, in conjunction with the Democratic-controlled House of Representatives, will pass a second round of fiscal stimulus more smoothly than before.
At present, from the perspective of the fundamentals of the US economy, epidemic control and fiscal stimulus are expected to improve the economic situation from both the production and demand side at the same time. The current unemployment in the United States is mainly concentrated in the service industry, and epidemic control is also conducive to the rapid reduction of the unemployment rate, further promoting the rebound of household consumption and completing the recovery of the economic cycle. At present, nominal yields on US bonds are low, and with the control of the epidemic and the investment of Biden's economic stimulus, the economy will gradually come out of recession and yields will begin to rebound. From an inflation point of view, the current inflation expectation in the United States has reached 1.73%, which has returned to the level before the epidemic, and the range of marginal repair tends to be smaller. Real yields on US bonds will rebound slowly over a long period of time, and gold prices will also be under some pressure.
