U.S. President-elect Joe Biden’s stimulus plan amounting to a whopping $1.9 trillion for COVID-19 relief as well as to bolster the U.S. economy has been well received by analysts. It could not only revive the nation’s economy but could also be the reasons why Asian market lose traction as there would be a reversal of funds. This is the opinion of James Sullivan, JP Morgan’s head of Asia ex-Japan equity research.
On Friday, Sullivan told CNBC’s “Street Signs Asia” that most investors had been very positive on Asia and emerging markets relative to the U.S. before details of the latest relief and rescue package were announced.
He said that they had seen more than 18 weeks of inflow funds move consecutively to Asia ex-Japan. He added that it was “highly likely” that funds would start moving out of emerging markets in Asia and would come back to the U.S. as a direct result of economic growth which is likely to receive a boost from Biden’s stimulus plan.
Biden’s $1.9 trillion plan is more than double the amount expected by JP Morgan. The analyst also said that it will be a “positive surprise” for the U.S. market. The plan will also foster higher levels of economic growth, which has been stagnant due to several factors, one of which of course is the pandemic.