Election Implication FAQs

The election analysis provided by Charles Schwab & Co., Inc. does not constitute and should not be interpreted as an endorsement of any candidate or political party.

Investors likely have many questions about the 2020 election. Votes were still being counted late Wednesday, but here are answers to some of the most frequently asked questions we’re hearing.

Q: What’s the biggest election takeaway for investors?

  • The big news for investors is that it looks like Republicans will maintain their majority in the Senate.
  • At this point, we appear to be looking at two more years of a divided Congress—and that means that whoever ultimately ends up in the White House is going to have a very tough time getting his agenda through Congress.

Q: What’s likely to get done over the next two years that would matter to investors?

It would be much easier to list all of the things that won’t happen in a divided Congress. But three things may happen:

  • Economic stimulus: Another round of stimulus is likely, but the bill almost certainly will be much smaller than Democrats would have supported if they had won the Senate. What is unclear is whether it will happen during the November/December lame-duck session of Congress, or early in 2021, after the new Congress is seated.
  • Infrastructure spending. Both parties have supported needed spending on roads, bridges, ports, airports, broadband capacity and other infrastructure projects, but the two sides have been unable to agree on how much spending and how to pay for it.
  • Greater scrutiny of Big Tech. There is already a Senate hearing scheduled later this month with the CEOs of Facebook and Twitter, to review how the social media platforms performed during the election. Next year, it’s likely we’ll see more scrutiny from Congress and the regulators that probably warrants investors keeping an eye on.