Despite the civil unrest and the prospect of higher taxes and more business regulation under a unified Democratic government, sharemarkets rallied on bets that a Biden administration would usher in significant new fiscal stimulus to boost the economic recovery from the COVID-19 recession.
The US blue chip Dow Jones Industrial Average hit a fresh record to briefly reach above 31,000 points, though big technology stocks fell on the prospect of of tougher regulation.
Australia’s benchmark S&P/ASX 200 Index on Thursday gained 104.9 points, or 1.6 per cent, to 6712 points after a jump in the spot iron ore price to $US168 a tonne sparked a rally in big mining stocks. The Australian dollar jumped through US78¢.
Government bond yields rose, on the potential of extra US stimulus spending generating long-awaited inflation.
Goldman Sachs’ Washington-based economist Alec Phillips said he expected an additional $US600 billion (2.7 per cent of GDP) in stimulus in the near term, “followed by a limited amount of tax increases and spending increases later in the year”.
President-elect Biden said he was shocked by the “unprecedented assault” on modern American democracy and called on President Trump to publicly condemn it.
“The world is watching, and like so many Americans I am genuinely shocked and saddened that our nation, so long the beacon of light and hope for democracy, has come to such a dark moment,” Mr Biden said.
“The work of the moment and the work of the next four years must be the restoration of democracy, of decency, honour, respect, the rule of law just plain, simple decency,” Mr Biden said.
Prominent serving Republicans such as Vice-President Mike Pence and Senate leader Mitch McConnell condemned the anti-democratic siege.
Mr Morrison avoided criticising Mr Trump, but said the scenes in one of the world’s greatest democracies were “terribly distressing” and “disturbing”.
The stern test of America’s democratic institutions came after Mr Trump continued to undermine Mr Biden’s victory and dispute the election of two Democrats to Senate seats for Georgia, which hands the left-of-centre party a narrow balance of power in the Senate.
Despite continued objections from a minority of Republicans such as Texas senator Ted Cruz and Missouri’s Josh Hawley, the crisis shook most other Republicans into supporting Mr Biden’s victory and dropping their plans to challenge the result on the floor of the US Senate.
The civil disorder and violence led the Morrison government to urge Australians to avoid travel to parts of Washington, DC and the neighbouring state of Virginia for two days. Australian embassy staff in Washington relocated to work from home safely, a spokesperson said.
Mr Morrison urged Americans to heed Mr Trump’s belated tweet directing protesters to go home peacefully.
Also in Australia, Orica chief executive Alberto Calderon said: “It is a sad day for the oldest democracy in the world and for all of us who believe in democracy.
“What we saw today underscores that we cannot take anything for granted and that we all have a duty to protect it.”
After earlier encouraging protesters to flood the US Capitol to oppose Mr Biden’s certification as the next president, Mr Trump later tried to cool things down.
“I am asking for everyone at the U.S. Capitol to remain peaceful. No violence! Remember, WE are the Party of Law & Order respect the Law and our great men and women in Blue. Thank you!” Mr Trump tweeted.
We gather today due to a selfish man’s injured pride and the outrage of his supporters whom he has deliberately misinformed.
Mitt Romney, Republican senator
Utah senator Mitt Romney, a former Republican presidential candidate, said the violent events were “an insurrection, incited by the President of the United States”.
“We gather today due to a selfish man’s injured pride and the outrage of his supporters whom he has deliberately misinformed for the past two months and stirred to action this very morning,” Senator Romney said to sustained applause from the floor of the US Senate.
Democratic Senate leader Chuck Schumer compared the attacks with the bombing of Pearl Harbour, and he called for the prosecution of the “domestic terrorists” and “thugs”.
Mr Trump accused Vice-President Mike Pence of failing to stop the certification of the Mr Biden’s election.
Mr Pence said he would defend the constitution and not stand in the way of democracy.
Mr Pence also stepped in to request the acting Defence Secretary to mobilise the National Guard to protect the US Capitol building, an act that would usually be carried out by the president.
Trump ally and Republican senator Lindsey Graham later declared, “Joe Biden and Kamala Harris are lawfully elected.”
A joint sitting of Congress will reconvene on Friday (AEDT) to continue the election certification process.
Mr Trump’s barrage of misleading social media posts prompted Facebook and Twitter to temporarily suspend his accounts and censor some of his messages.
With almost all the Senate votes counted in Georgia, Democrats Raphael Warnock and Jon Ossoff were projected to record narrow victories over their Republican opponents in the usually conservative state.
The Reverend Warnock led his Republican opponent, Kelly Loeffler, by more than 73,000 votes, or 50.8 per cent to 49.2 per cent.
In an about-face after the violence erupted, Ms Loeffler dropped her plan to challenge the result.
“The events that have transpired today have forced me to reconsider and I cannot now in good conscience object to the certification of these electors,” she said.
“The violence, the lawlessness and siege of the halls of Congress are abhorrent and stand as a direct attack on the very institution my objection was intended to protect.”
In the other Georgia Senate race, Mr Ossoff led Republican incumbent David Perdue by more than 35,000 votes, or by 50.4 per cent to 49.6 per cent.
The two Democratic Senate victories give the party 50 seats in the 100-seat Senate, with Vice-President-elect Kamala Harris set to have the deciding vote in the event of deadlocks.
The tumultuous day kicked off the final 14 days of the Trump administration. Mr Biden will be sworn in as president on January 20.
In Australia, Jeanne Johns, chief executive of Incitec Pivot, which has US plants among its global portfolio of fertilisers and explosives production, noted that more than half the company’s earnings come from operations in the Americas, “so an effective and supportive government is important to us”.
Over the years, we have successfully operated under both Republican and Democratic administrations, and we expect this to continue with the Democrats now controlling both the Senate and the House,” Ms Johns said.
The Biden administration will undoubtedly be focused on bringing the COVID outbreak under control and stimulating the economy.
Biden has been a pragmatic politician and will understand the criticality of jobs and the economy.
This should support the need for stimulus and infrastructure spending, and were hopeful his presidency will be good for business.
With Angela Macdonald-Smith

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