Is Wall Street Truly Bullish on the Proposals of President Joe Biden?

• Author: Chris Remington
• Posted: 2024-05-20

In just a few short days, Joe Biden will transition from President-Elect to President of the United States. The economy and health care situation he inherits will be nothing short of catastrophic, and his leadership will be tested almost as soon as he walks in the door. Indeed, few Presidents have ever inherited so many challenges at the same time.

Biden has proposed one of the most liberal agendas of any President in decades, promising higher taxes on the wealthy and corporations, as well as a stronger regulatory environment. However, that hasn't stopped many on Wall Street and in corporate America from looking forward to his Presidency.

Stimulus, Stimulus, Stimulus

Earlier in 2020, the Democratic-led House passed a massive $3 trillion stimulus package that included an array of financial goodies designed to get consumers spending and cover massive shortfalls for state and local governments. A more scaled-down version of this plan eventually passed the Senate, but it wasn't nearly enough for many.

Now, the prospect of a Biden Administration has pressed new life into this area, with Biden actively supporting a $2,000 stimulus check, instead of the smaller $600 one which was passed in December. With Democrats now in control of the Senate, such a proposal seems to be within reach, provided it can earn the support of every Democrat. Additional financial stimulus measures also seem possible, particularly in terms of supporting state and local governments.

All of this has pleased Wall Street and corporate America, who view stimulus measures as the best way to get consumers back into the money-spending mode. They also view stimulus as holding the possibility of putting money directly into their pockets in the forms of direct grants, loans, or tax breaks.

Civil Unrest Reduced?

It may sound silly, but it's true: Civil unrest is bad for business, and the stock market tends to suffer during periods of major political upheaval. There is no question that the past few years - and particularly 2020 - were tumultuous times for America, and these challenges were exacerbated by the words and actions of President Trump.

Joe Biden has promised to be a different President, and he unquestionably campaigned differently than President Trump. All of this holds the potential to better unify the country and tone down the rhetoric. This, of course, can only boost consumer and corporate confidence, making it easier for Americans to freely spend money and travel.

It is also worth reiterating: Corporations like stability. They like having a good idea of what will happen next in government, and a government that does not respect laws and antagonizes its people will only lead to more turmoil. This, in turn, will break the economy. Many corporate leaders were clear during the Trump presidency that his repeated attacks on democratic institutions and the people that served them were bad for business. A Biden Presidency promises a fresh start and a chance for people to get "back to normal," something that many businesses want at this point.

A Better Vaccine Roll-Out

There is no question that the vaccine roll-out has been one of the biggest disasters in a pandemic marked by much turmoil. Originally, the Trump administration promised 20 million doses of the vaccine to be given out by the end of 2020, and they came well short of that goal. Confusion about prioritization, supply chain issues, and distribution nightmares have created massive political headaches for the federal government and states.

The Biden Administration has promised better coordination, medical input, and smoother execution of its vaccine strategy. This, in turn, has provided comfort to many on Wall Street, who have noted that there can be no economic or unemployment recovery without a coherent and successful vaccine strategy. If a vaccine can truly be unrolled in a way that protects people against COVID, more Americans are likely to get back to work and back to spending money. This - and only this - can stave off economic disaster.

Additionally, Biden has promised to enact other public-health measures that the Trump administration eschewed, such as a mask mandate. This, in turn, may be able to help get the pandemic under control and get more people out of their homes and into shops and restaurants.

A Biden Administration will unquestionably pose many challenges to Wall Street and corporations. However, given the turmoil that followed the Trump Presidency, it seems apparent that many in this sector of the world are ready for a fresh start.