As I write this, counting in the US elections remains underway, and we're a long way from finding out, with any certainty, which candidate will be the next President of the United States. At the time of writing, most media outlets have Joe Biden ahead, and he appears most likely to prevail, going off the latest data.
So, if Mr. Biden does emerge victorious, what will a new president mean for global markets, and, of course, the S&P/ASX 200 Index (ASX: XJO) and ASX shares?
According to reporting in the Australian Financial Review (AFR), Joe Biden's priorities (assuming he is sworn in as President of course) are likely to be focused on the coronavirus, economic recovery and healing the bitter divisions that will inevitably stem from the close election result.
These are all domestic American issues.
Bidenomics for the ASX?
However, the AFR article also notes that climate change and foreign policy will be secondary priorities for a Biden administration. On climate change, the article notes that Biden has stated that "if we don't get this right, nothing else matters".
As such, it expects Biden to quickly rejoin the Paris agreement on climate change and "pressure other countries to do more. Australia will be among them."
That may indicate that a Biden presidency might not be too kind to fossil fuel extractors like BHP Group Ltd (ASX: BHP) and Woodside Petroleum Ltd (ASX: WPL).
The article also notes that a Biden administration's foreign policy may seek greater engagement with China. It's no secret that Sino-US relations under President Trump have deteriorated amid trade wars and tariff implementation.
The present relationship Australia has with China is also showing signs of being shaky. Just this week, China announced fresh import restrictions on some Australian goods, after flagging wine importation restrictions earlier in the year.
Although the AFR notes that "China will continue to be a central strategic and economic competitor" to the US, it also expects more "direct hard talking" between Washington and Beijing.
If this relationship thaws, we could see a concurrent thawing of our own relationship with China. This could be good news for ASX shares like Treasury Wine Estates Ltd (ASX: TWE) and other Australian companies exporting to China.
All in all, the article posits that a Biden presidency could bring modest changes in the economic sphere, but a dramatic change in the global diplomatic order. It will be interesting to see how these changes play out for Australia and the ASX.
