As the United States presidential election looms and four years after President Donald Trump's surprise victory stirred up markets, investors are now prepared for short-term trading turmoil and major long-term policy changes on the eve of the November 3 election.
Investors may confront remarkably different paths for the nation on government spending, taxes, regulation, and trade depending on who wins the Oval Office, the Republican candidate Donald Trump or Democrat nominee Joe Biden.
According to analysts, stock market inconstancy would possibly increase this week as there could be a delay in the U.S. presidential vote count due to the persistent COVID-19 pandemic.
Passakorn Linmaneechote, research chief at Kasikorn Securities (KS), foretells that the former Vice President would win the election with the Democratic Party taking over the majority of the pair of Congress houses.
Investors Brace for a Wild Ride on U.S. Election Night
The chief executive of hedge fund Hercules Investments has initiated a trading technique purported to benefit from a momentary rise in volatility that could possibly transpire when investors adjust their positions in accordance with the presidential election result.
Donald Trump and Joe Biden have remarkably varied approaches to social issues, geopolitics, and the economy.
Opinion polls indicate Biden would sweep the November 3 election, but they have not been reliable in 2016 when Trump surprisingly won against Hillary Clinton, reported The Economic Times.
Global Stocks Rally
Wall Street stocks rallied at the opening bell as United States citizens voted in an election slated to ripple through the world's financial markets.
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Tight races are anticipated in key battleground states.
According to investors and traders, markets have positioned to expect a triumph by Biden and possibly a "blue wave" in which Democrats also grasp control of the Senate and House of Representatives.
America's stocks have risen so far this week running up to Election Day as investors digest the most recent polls.
On the eve of polling day, Biden had an achievement of a 10-point national lead and a 6-point victory in battleground states over Trump.
Biden may be ahead in national opinion polls, but races are more rigid in battleground states that could tip the advantage to Trump. The outcome most likely to stir markets in the near term may be no immediate outcome at all.
"At this point, markets fear a contested election. Anything other than a contested election, a decisive victory in particular, would be good news for stocks," according to Kristina Hooper, chief global market strategist at Invesco, reported Global News.
The majority of voting has been established by mail. This could delay counting in some states, including North Carolina, Pennsylvania, and Texas, until after the presidential election day.
According to Linmaneechote, "We estimate the election results have a chance of being delayed, or in some states, a court may request new vote-counting approvals. This could lead to volatility in the stock market during the week if the election results come out in a manner that we initially assessed," reported Bangkok Post.
