Recovery in India continues
The Tantallon India Fund closed down 0.98% in October with the markets roiled by resurgent Covid-19 infection rates and the risks to global recovery and growth from the imposition of new lockdowns, the cacophony over the prospects of a bitterly-contested US Presidential and Congressional Election, and the growing risks of significant antitrust measures being imposed upon Big Tech globally.
Having won the popular vote and a mandate, President-Elect Joe Biden will probably have to accept an obstructionist Republican Senate majority, the first newly-minted President in the last 30 years starting without an accommodative Congress, effectively securing Trump’s pro-business stance on deregulation and the tax code. In the absence of big-ticket fiscal stimulus, the Federal Reserve will likely continue to have to do the heavy-lifting, maintaining accommodative monetary policies for the foreseeable future, “encouraging” a weaker USD outlook. We expect that Biden will prioritise the pandemic-battle (from masks to contact tracing and vaccines) and the economy while looking to systematically restore local and global linkages on climate change, co-ordinated responses on pandemics and health issues, trade, equity and social justice, and regional military alliances. Not surprisingly, the markets have rallied, assuming greater policy predictability; a more modest stimulus package than Nancy Pelosi’s aspirational US$3 trillion ($4 trillion) proposal; corporate tax rates remaining “low”; no immediate change to the current capital gains tax regime; a potential “easing” in the trade war and tensions with China; diminished regulatory scrutiny for Big Tech; and rational, apolitical Covid-19 vaccine intervention.
