Markets Respond to the Georgia Senate Run-Offs

Historic Election Results in Georgia

The votes for the run-off elections in Georgia were finalized yesterday. The Associated Press declared that Democrat Raphael Warnock had won against Republican Kelly Loeffler and Democrat Jon Ossoff won against Republican David Perdue

Following the presidential election when Joe Biden became the first Democrat to win Georgia since Bill Clinton won the state in 1992, both parties poured money into the high-stakes Senate run-offs. Since both Democratic candidates from Georgia won, the Senate will be tied at 50/50 and Vice President-elect Kamala Harris will be the tie breaker in any tied vote. Democrats will also control Congress and the presidency.

Construction, Cannabis, and Green Technology Stocks Surge

Investors across industries are now working to predict what impact these Senate races will have on their businesses. Many expect that the recent blue wave will also lead to a “green wave” with more investment in environmentally conscious initiatives. A number of alternative energy stocks are climbing, such as EV maker Tesla (TSLA) and solar panel manufacturer First Solar (FSLR).

Shares of construction-related companies, like Caterpillar (CAT), Deere (DE), and US Concrete (USCR) also rose yesterday as investors predicted more infrastructure spending. Cannabis-related stocks also jumped as investors considered the possibility that federal marijuana laws may become less strict. These companies included Aphira (APHA), Tilray (TLRY), and Canopy Growth (CGC). In November, a number of states voted to legalize medical and/or recreational marijuana, but changes on a federal level would have a much more significant impact.

Big Tech Stocks Fall

Big Tech stocks dipped yesterday in response to news from Georgia. Apple (AAPL), Amazon (AMZN), Google (GOOGL), and Facebook (FB) were all down in spite of a broader market rally.

Investors seem to believe that a Biden administration and a Democrat-controlled House and Senate could mean more regulation, antitrust probes, and corporate taxes for Big Tech. However, even with both Democrats in Georgia winning, there will still be only a slim democratic majority in the Senate. This could mean that sweeping changes to Big Tech regulations could be difficult to pass. Investors in the technology industry, and all other industries, will be eager to see how this historic election will impact the future of their businesses.

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