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In the U.S., a vote for Democratic presidential candidate Joe Biden is a vote for increased taxes on the wealthy and corporations. With Biden leading the polls by six percentage points, the impact of a Biden win on financial markets was outlined in a report from TD Economics on Wednesday.

Markets tend to have a short-lived setback following a Democratic candidate win — and a boost following a Republican win, TD noted. Equities also tend to underperform when a party sweeps the White House and Congress.

Though a Democratic sweep this November is anything but guaranteed, it would likely be particularly negative for equities, considering the Dems’ tax platform, which includes an increase on the corporate tax rate to 28% from 21%, among other corporate tax increases.

TD also noted that Biden comes with higher regulation risks for markets, as well as a pro-labour bent that could challenge corporations’ bottom lines.

On the plus side, Biden would present “a more predictable and business-friendly path” when it comes to geopolitics and trade policy.

“Trade wars started by the Trump administration had added volatility to markets in the past, undermining overall business investment and export growth in the near term,” TD said.

Biden would also likely be less intrusive with the Federal Reserve — another positive for markets.

“Biden has stated that he supports an independent Fed and would be unlikely to criticize the Fed in public or nominate unconventional candidates for board positions,” TD said.

Further, Biden’s stance for increasing immigration and reducing income inequality through a more progressive tax structure would boost economic growth and subsequently benefit markets, the report noted.

An increased pace of economic growth would “raise the natural or equilibrium fed funds rate — what economists call R* — in turn, lifting bond yields,” TD said.

In the end, regardless of who wins the U.S. election, the market impact will likely pale in comparison to a treatment for the coronavirus.

The dominant influence on markets in 2021 will probably be whether a Covid-19 vaccine becomes available and gets distributed, TD said.

For full details, read the report from TD Economics.