The outcome of the US election wasn't as expected. The Trump campaign once again proved the polls wrong with a surprisingly strong showing. However Joe Biden is now President elect.

Even so, most likely the Democrats will control the lower house of Congress and the Republicans the upper house. This will produce a relatively stable outcome on the policy front. There will be a substantial but not massive Covid support and stimulus package that the share market will like.

However there won't be the corporate tax hikes that Mr Biden would like. There will be policy moves towards climate change and renewable energy but they won't be radical or dramatic.

Mr Biden is likely to work hard to improve global trade and international relations via collaboration and negotiation. The US-initiated trade disputes with Europe and other countries should be resolved. Even the conflict with China may be reduced.

Mr Biden and Mr Xi were Vice Presidents of their countries at the same time and know each other quite well. Hopefully this may help the US provide effective leadership of the resistance effort against Chinese expansionism.

Investors also face threats and uncertainties. Covid continues to spread more widely than ever in Britain, Europe, India, the US and other countries. While the death rate is much lower in the second wave it is difficult to see how the virus will be controlled without a vaccine.

Financial markets are not influenced by the number of people who catch the virus but are greatly concerned about lockdowns and restrictions that limit business activity. The new US President may impose more severe restrictions that will cause markets to fall.

An effective vaccine isn't assured but it seems likely that some of the fifty-odd teams around the world working on producing one will succeed. Large numbers of vaccine doses can be produced quickly so a Covid preventative may be available in a few months.

While there are threats, the fundamental conditions for business are positive. The record low interest rates are very helpful, keeping the cost of borrowing down. Inflation also remains very low.

The low rates are also pushing more conservative investors to buy shares and properties for income and growth. This is likely to continue for several years.

Shares in companies in the travel and leisure industries are still depressed and provide healthy growth potential.

The low interest rates also make borrowing to invest in shares, managed funds and properties look attractive for investors with reliable, higher incomes.

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