Trump vs. Biden: Outlook for the US election: Will the big crash come if Trump loses the election? | message
Forex in this article
indices in this article
Trump has squandered his lead
Democrats take advantage of the hour
Biden’s election victory would not be a disaster
At the beginning of 2020, the US election campaign looked like the incumbent US president Donald Trump his second term as good as in his pocket.
In addition to the relatively good survey values, many experts also believed that Trump has good chances of another four years in the Oval Office.
Trump has squandered his lead
Now, almost half a year later, the mood in the land of unlimited possibilities has changed a lot. The global corona pandemic and nationwide protests after George Floyd’s death have now apparently led many Americans to change their attitudes to the Trump administration. While Trump fans continue to forgive their president for any faux pas, the rather moderate voters have increasingly turned to the Democrats in the past few weeks.
So now the situation arises that the designated presidential candidate of the US Democrats, Joe Biden, contrary to the original expectations of the political experts, is significantly ahead of incumbent Donald Trump in surveys. According to the latest “Reuters” surveys, the democratic candidate has even managed to outbid the incumbent president by up to 13 percentage points. Around 48 percent of registered US voters are now ready to vote for Biden on November 3. Trump, on the other hand, can currently only combine around 35 percent of the voters. Accordingly, it is hardly surprising that only 38 percent of US citizens surveyed regard his public appearance as positive and that his leadership causes 57 percent of American adults to be rejected.
Trump – the darling of Wall Street
That Donald Trump is Wall Street’s favorite candidate is currently out of the question, despite poor polls. “Purely for them Financial markets the best would be Trump.  For him, the markets know best how it goes on, “according to” Brse online “is the assessment of Robert Greil, the chief strategist of the private bank Merck Finck, because Trump measures his political success directly by the price quotations of the major US stock market indices It is also very important to him that the US Federal Reserve, led by Jerome Powell, pumps countless fresh billions into the US economy every month and maintains the zero interest rate phase.
Will the big crash come when Trump loses the election?
Speaking at campaign events such as: “If I don’t win, you will see a crash like never before,” Trump shouts at the moment and tries to get many US voters to his side. At the latest after the resignation of the two left-wing presidential candidates Bernie Sanders and Elizabeth Warren, the allegedly critical situation for Wall Street has relaxed enormously. Unlike Sanders and Warren, Biden, the designated Democratic presidential candidate, is neither a major opponent of Wall Street nor a socialist. The 77-year-old ex-vice president is considered a very moderate candidate who also finds beginners among more conservative buyers. Accordingly, the big shock for the markets should be limited even when Donald Trump is voted out.
“Biden shouldn’t trigger too much turbulence on the financial markets,” said Robert Greil’s assessment. It should not be forgotten, however, that Biden, for example, is calling for US President Trump’s tax cut to be withdrawn, which should be unnecessarily burdensome for many US companies in the current situation.
The magic of the US presidential cycle
Decoupled from the personality of the individual presidential candidates, there is something like a presidency cycle in the United States, which has been determined with impressive precision and a high hit rate using the Dow Jones Index for around 120 years. “The US presidency cycle is one of the few functioning regular cycles in the financial world,” said market strategist Robert Rethfeld to “Tagesschau”.
For example, there is an 83 percent chance that the stock exchange prices will rise if an incumbent president runs for re-election. Furthermore, election years, with an average plus of around eight percent, are the second best years on the stock exchange – after the pre-election years. Because in a year before the election, the prices on the stock exchanges rise by an average of around 12 percent.
The reason for these supposed phenomena is, however, relatively easy to understand. In the months leading up to the election, the incumbent of course puts all the levers in order to boost the economy of his country, which the exchange then anticipates early on in practice.
In view of the new highs on the US stock markets, however, the question now arises as to which factors can provide new impetus in the remaining five months until the presidential election in November. Because the speed of the V-shaped recovery rally as a result of the corona crash in the S&P 500, Dow Jones
and especially in the NASDAQ has now amazed even the greatest optimists.
The central bank sets the tone, not the president
Regardless of who can celebrate moving into the Oval Office on November 3, 2020: In order to get the US economy back on track, the Federal Reserve System is not going down the path of the ultra-relaxed Monetary policy or the maximum stimulation of the markets. “We don’t even think about one Rate hike to think, “said central bank president Jerome Powell in a recent statement.
And as long as an ever-increasing supply of money ensures rising share prices and low interest rates, it doesn’t make much difference whether the most powerful man in the world comes from the Democratic or Republican camp.
Pierre Bonnet / Forex-news.com.net
Image sources: Win McNamee / Getty Images, John Moore / Getty Images