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What will become of the Wall Street after the US elections?
Investors have become more confident in the past few days that Joe Biden will win Tuesday's presidential election in the United States, with placements in options indicating a 83,3% probability in his favor, up from 63% last week, while Congress would follow to be dominated by Republicans, which would mean a continuation of the factual situation, according to Bloomberg.
A victory for the Republican Donald Trump would instead provoke a reaction similar to the decline in markets triggered by the British vote in June 2016 to leave the European Union, with dramatic withdrawals of risky investments in favor of safe assets, according to Barclays British analysts.
Shares on Wall Street usually have a negative trend immediately after the election. US stocks have risen 1 to 3 since the 1928 election, according to Bespoke data, which looks at the S&P 500, MarketWatch reported.
Dow Jones data shows that the S&P 500 fell an average of 0.9 percent after election day, with the largest five declines following the Democrats' victory. Dow Jones also shows that 3 of the top 5 gains also came as a result of a Democrat victory, including a 1.5% advance when Bill Clinton won a second term on November 5, 1996, similar to after Franklin D. Roosevelt's victory in November 1936.
In the long run, both candidates will want to increase spending and taxes, which would support the advance of stock quotes, but not investments in fixed-income financial instruments.
Stock markets have already considered a victory for Joe Biden, so the increase in shares after the election will be limited, says Margaret Yang, an analyst at CMC Markets in Singapore.
Barclays anticipates an up to 3% advance on the Wall Street stock market in the event of Biden's victory.
However, Deutsche Bank predicts that, given the sense of relief from the prospect of continuity and predictability, Biden's plan to limit capital gains could affect the actions of financial companies.
Under Biden, pharmaceutical action could be adversely affected by pressures to limit drug prices.
Donald Trump's victory could lead to some of the biggest declines in financial stocks since the election, according to Morgan Stanley, which notes the risk of tighter regulations and changes in tax laws that could affect companies such as Goldman Sachs Group and JPMorgan, but also investment funds.
Hospital operators and health care providers, such as HCA Holdings and Universal Health Services, would benefit from continued grants under the Affordable Care Act.
UBS also anticipates that the actions of education companies will benefit from a Biden presidency, while its plans to reduce dependence on fossil fuels would benefit renewable energy producers.
Judging the long-term impact of a Trump presidency on the stock market is difficult, as some of its proposals are extremely unconventional, such as trade and immigration, or very vague, such as taxation, said John Normand, director of foreign exchange. international goods and interest at JPMorgan.
No one can predict what will happen on long term. Uncontroversial...it sounds more what the blue side stands for. I am not an expert but the USA is broke and so are many other countries and I doubt any president can save the world.
We'll see how the European elections will be manipulated. What I know about politicians is they lie, cheat, manipulate, are great in fooling people and always get away with it. If it comes to it I prefer a straight person not someone who practised lying for many years.
I have big doubts about the whole idea of democracy, the elections (campaigns paid by European countries). If you ask me Biden is ugly too and so are and were the media during the past years. They just need a puppet for the bigger plan. Biden fits in, Trump doesn't.
I don't know about Biden but I know they did for Hillary. Merkel did with tax money. I noticed all they did was dragging Trump down and the announcement of the vaccine right after the elections (again Germans involved) is no coincidence either.
No one can predict what will happen on long term. Uncontroversial...it sounds more what the blue side stands for. I am not an expert but the USA is broke and so are many other countries and I doubt any president can save the world.