(Reuters) - Global stocks rallied on Thursday while the dollar took a back seat as Joe Biden inched towards taking the White House following victories in Michigan and Wisconsin, although the Democrats looked unlikely to secure a Senate majority. Markets were trying to gauge the fallout from a splitgovernment, and expectations rose that a policy gridlock thatwould prevent greater regulation and limit fiscal stimulus couldalso force the hand of the U.S. Federal Reserve. Each of Wall Street’s three major indexes were higher for a fourth straight day on Thursday while stocks in Europe followed Asian bourses to clock healthy gains. Meanwhile, longer-dated U.S. Treasuries ticked lower after Wednesday’s huge gains and U.S. jobless claims data, pushing yields up modestly. COMMENTS: JEREMY SCHWARTZ, HEAD OF GLOBAL RESEARCH AT WISDOM TREE “If the Republicans keep the Senate it doesn’t matter who is president. The market was expecting a very strong fiscal impulse, offset by higher taxes and that might have led to selling by some people. But as that has come off, tech (sector) has really run. There is an expectation that Biden will have a collaborative tone with (senate majority leader Mitch) McConnell, coming to an agreement about passing some stimulus and taking tax hikes off the table. So you keep the positive of low tax rates and a collaborative spirit which could bring some stimulus. Markets will look past some of developments such as Trump contesting the election results, as long as there are no other ramifications such as social unrest that spirals out of control.” JOHN PETRIDES, PORTFOLIO MANAGER, TOCQUEVILLE ASSET MANAGEMENT, NEW YORK “Nothing is set on stone yet but the market is getting what it wanted and that is Republicans holding the Senate and a Biden victory. That was one of the best case scenarios that the market was looking for. “By having the Republicans in the Senate, even though we don’t know who the president is, it basically enforces that if Biden is elected president, he’ll have a harder time passing through his tax plan which was to raise corporate. “ “Now investors just need to set their expectations that it could be still several more days if not longer until we know who the official president is. If Biden does squeak out in some of these states, president Trump already has an army of attorneys to fight the process. Presumably if it were to flip and Trump were to pull it out, Biden would do the same and contest the result. We need to be patient here to see who will be President but if Republicans were to win the Senate, that I think that is key and that’s why the markets are responding so positively.” PAUL EITELMAN, SENIOR INVESTMENT STRATEGIST, RUSSELL INVESTMENTS, SEATTLE “A protracted period with no known result could inject volatility into financial markets. What we do know is that the U.S. and global economy are both still in the early innings of a new cyclical expansion. Politics offers plenty of surprises, but there are some very powerful economic forces already at work that don’t care at all about who is in the White House.” FRANCESCA FORNASARI, HEAD OF CURRENCY SOLUTIONS, INSIGHT INVESTMENT, LONDON “The market is still trying to get its head around the what this result means and the uncertainty is likely to continue until we know who will be the next President. If any contesting is limited to recounting votes, we would expect the impact to be short lived; but if it becomes longer-lasting and adversarial by going through the Courts, then I suspect that will have longer term repercussions and safe haven currencies will outperform vs the US dollar.” ROBERT WOLF, FOUNDER, 32 ADVISORS, NEW YORK, NY “A split election with a Biden Presidency along with a GOP led Senate will lead to growth oriented stimulus such as infrastructure but without the likelihood of overly burdensome regulations nor big tax reform legislation being passed. It will also bring on a less volatile and much welcomed environment bringing the end to a White House governing by Twitter.” NOEL DIXON, GLOBAL MACRO STRATEGIST, STATE STREET GLOBAL MARKETS, BOSTON, MA “As the market sees it gridlock equals the opportunity to still pursue stimulus but constrain Biden from any major progressive impulses - higher taxes, higher regulation. The tones coming from McConell will be critical once the dust settles and Biden remains on top” FRÉDÉRIQUE CARRIER, HEAD OF INVESTMENT STRATEGY, RBC WEALTH MANAGEMENT “While the equity market typically prefers gridlock, this isn’t always the case. Market participants have been clamoring for another large COVID-19 fiscal stimulus package, and have also begun to get their hopes up for an infrastructure spending package. These bills would probably be more modest in size and scope with a divided Congress. Fiscal stimulus could be delayed until after the inauguration, and an infrastructure package is no guarantee.” “But we think gridlock would be perceived positively for certain sectors. For example, it would mean that far-reaching fossil fuel, health care, and financial industry regulations would be much less likely. We also doubt the Tech and Communication Services sectors at large would face serious regulatory challenges, although select companies could continue to face scrutiny in the near term.” PETER LEGER, GLOBAL FRONTIERS PORTFOLIO MANAGER, CORONATION FUND MANAGERS, SOUTH AFRICA “A Democrat win in the U.S. does not mean a stronger dollar, so currencies around the world get a break and we see the dollar weaken and you have currencies strengthening in a number of other markets, so from a returns perspective it’s very supportive for emerging markets.” The trade hostility we started seeing reduces, which is beneficial to any open global economies.” JUSTIN ONUEKWUSI, PORTFOLIO MANAGER, LEGAL & GENERALINVESTMENT MANAGERS, LONDON “The Fed today is a bit of a sideshow, but there is a chanceit may strengthen forward guidance around potential QE, and thatwould be dollar-negative as you may also have less fiscalstimulus coming. Another thing that makes us medium-termnegative on the dollar is whether you see a weaker United statesfrom a political perspective going forward. If (post-electionwrangling) goes on for weeks or months, with Republicansrefusing to accept the results, that’s not positive from apolitical perspective.” DIDIER SAINT-GEORGES, MANAGING DIRECTOR, CARMIGNAC, PARIS “There is a lot of position-squaring going on and we shouldnot fall into the mistake of reasoning out moves every hour.Things like green energy are long-term trends which willcontinue.” “Compared to what was anticipated, some (Treasury yield)curve flattening may make sense, but even if some ratespositions were unwound, we should not get carried away trying tosee a reversal. One takeaway is that regulatory risk to thepharma sector has reduced. Pharma has been a laggard this year,so we may see some catch-up.” JONATHAN BELL, CHIEF INVESTMENT OFFICER, STANHOPE CAPITAL,LONDON “The outcome of the election in terms of the potential for aDemocratic president and a Republican Senate is many ways thebest news for markets because it prevents more extremepolicies.” “Biden being elected increases the chances of a fiscalstimulus deal, but (with a Republican Senate) it also reducesthe ability for him to push through significant tax rises orpolicies that might constrain the likes of Amazon and Apple interms of competition authority. The push for him to increaseanti-trust measures is limited and that’s perhaps why we’reseeing the Nasdaq rise.” SIMON CARLTON, CHIEF EXECUTIVE OFFICER, CARLTON JAMES GROUP,LONDON “If you look at the numbers, trends, previous cycles,unemployment numbers -- a double-dip recession is coming, and Idon’t think either president, whoever gets in, is going to stopthat. Because I think a correction is not only likely, but is arequirement of these economic cycles. And the COVID dip wasshort-lived and there are so many different factors to take intoaccount that I don’t think we’ve seen the actual correction asof yet.”