Democrats win the US House and Senate, and Asia oscillates without a defined direction

Democrats won a majority in both Houses of Congress in the midterm elections, according to Money Times. The turnaround takes away from Trump's Republican Party the control it had over the House and Senate. The counting began when the first voting stations closed their work, around 8pm on Tuesday (3), Brasília time, and Revista Oeste reports that the Democrats took over both Houses in the early hours of Wednesday (4).

In the Senate, Democrats account for 54 of the 100 seats. According to Revista Oeste, 20 were elected in this dispute and seven seats were taken from Republicans. In the Chamber, the Democratic bench reaches 228 seats, a number that exceeds the minimum of 218 required to form a majority by 10, after wresting 25 seats from the Republican field spread across more than ten states. The dispute involved 435 seats in the Chamber and 35 in the Senate.

For Money Times, the market sees the divided Congress as reducing the risk of sudden policy changes. In other words, investors' reading is that a Legislature without total control by a single party tends to limit major changes in economic rules, a point that is of interest to those who follow interest rates and the direction of public accounts.

In Asia, the trading session had opposite signs. According to Times Brasil, on Tuesday (3) most Asian stock markets fell, pressured by technology shares. South Korea and Taiwan lost more than 3%. Kospi lost 3.59% and ended at 5,648.79 points, with SK Hynix falling 5% and Samsung Electronics falling 4.2%. According to Estadão Conteúdo, cited by Times Brasil, Seoul and Taiwan were at their lowest level in three months.

Previously, in the United States, the Nasdaq fell by more than 1% on Monday (2), with concerns about how much companies spend on artificial intelligence and the return on this investment, according to Times Brasil. On Wednesday (4), with the news of the change in Congress already having repercussions, Money Times reports that Asian trading sessions ended without a common trend, with divergent results.

Money Times also brings numbers from other markets in the region. In Shanghai, the Composite fell 0.82%, to 3,608.10 points, and in Shenzhen the Composite fell 1.15%, to 2,073.19 points. In Taiwan, Taiex fell 3.59%, to 43,307.54 points, with a decline of 1.5% for TSMC and 7.4% for MediaTek. In Hong Kong, the Hang Seng rose 0.57% to 23,525.97 points.

What changes for the investor

For those who follow Nasdaq, interest rates and the dollar, the result changes the political scenario in Washington, but the immediate effect on prices still depends on how the new balance between the Houses will translate into concrete projects. The market reading, according to Money Times, has a lower risk of sudden changes, which tends to provide more predictability for those who need to plan deadlines. At the same time, the fall in technology stocks in Asia and doubts about the return on spending on artificial intelligence show that the sector remains sensitive to data and expectations. It is worth following Congress's next steps on issues such as fiscal responsibility, taxes and public spending, because these are what define the path of interest and exchange rates.

Automatically translated from Portuguese.