Investing With the Georgia Senate Runoffs in Mind


Jan. 5 2021, Updated 11:23 a.m. ET

On Jan. 5, Georgians are vying for Senate control. The tickets pit Republican David Perdue and Democrat Jon Ossoff against one another, with Republican Kelly Loeffler and Democrat Raphael Warnock on an adjacent ballot. These runoff elections have been on investors' minds since the presidential election in November 2020.

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Senate control on either side of the coin will shift the market. Analysts suggest that the landscape could sway in various directions. All things considered, the competing politicians are heavy investors. Keeping this in mind could add padding to your portfolio while waiting for the election results.

What's happening in the Georgia senate runoff?

Perdue and Loeffler have highly aligned themselves with President Trump. In contrast, Warnock and Ossoff oppose Trump's vision. Despite typical partisan delineation, this election isn't ordinary.

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First, Loeffler and Warnock are fighting in a special election. Loeffler was appointed to Congress after the resignation of Sen. Johnny Isakson, who left due to Parkinson's-related health issues.

Also, none of the candidates received enough votes for a viable win during the election in November 2020. The status quo requires candidates in Georgia to receive more than 50 percent of the vote to avoid a runoff, which none of the candidates managed to achieve.

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If Democrats win the Georgia Senate, expect big moves from the White House

There's quite a bit at stake in the Georgia runoff elections. If Democrats win both seats, Congress as a whole would be split exactly in half. Since there needs to be a majority leader, Vice President-elect Kamala Harris would be required to break the tie. As an integral part of the Biden administration, Harris' obvious choice would be a Democrat.

Even with slim control over Congress, the Democratic party could do a lot for their agenda including stimulus plans, environmental regulations, and taxes. This could shock the market by reducing the value of the dollar and increasing bond yields, but the market would likely regulate over time.

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What if Republicans win the Georgia senate?

Despite its position as a historically red state, Georgia managed to give Biden a win in November. Now, the fate of Congress is in its hands. Because of regions like Savannah, Atlanta, and Augusta, the Republican lead isn't wholly secure.

Still, Republicans just need one seat to keep a slim majority. If this happens, equities are likely to surge.

Stocks to sway the Georgia senate runoff

At the end of 2020, the stock market was at a record peak. These results could shake that high.  

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Banking companies in the S&P 500 experienced a major bull run for the last few months of 2020. Georgia's Republican candidates are heavily invested in banks. A Democrat win could cause these stocks to falter, but only slightly since increased fiscal spending on behalf of the Democrats could prop them up again.

Republicans are also heavy on oil and gas. Many Democrats are, too, but Biden's climate plan would intercept the industry's rising path — although alternative energy sources like off-shore wind are more likely to thrive.

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Infrastructure stocks could benefit from a Democratic win including materials, construction, and other industrial companies.  

However, big tech and healthcare may face stalled growth if Democrats win and pursue heightened monopoly regulations and focus on medical costs. 


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