Before the outcome of the American presidential election, an update on the economic markets, modeled on this event that the entire planet is awaiting.
Alexandre Tavazzi, head of CIO Office at Pictet Wealth Management, summarizes the current market situation: “Until 2-3 days ago, the markets were anticipating a Trump victory since ultimately a Republican victory would result in a significant deficit. And over the past 2-3 days the market has rather flattened, which would seem to indicate that the belief in a Trump victory is diminishing.”
The economic indices do not always predict a clear scenario, but whatever the outcome of the long-awaited election, the consequences will be reflected on the markets, remains convinced Alexandre Tavazzi who sees four scenarios.
2024, far from 2020
The political-economic situations have evolved significantly between the inauguration of Joe Biden in 2020 and the current presidential election. From a macroeconomic point of view, the conditions between 2020 and 2024 are very different with a pandemic and a period of high inflation between these two presidential elections, analyzes the economic expert.
For him, four scenarios exist because the elected president will be able to choose alone, without the advice of Congress, where to place the cursor on questions of immigration and customs tariffs. In a Trump context and a Republican Congress, for example, Alexandre Tavazzi foresees customs tariffs on the rest of the planet and a reduction in taxes for businesses (decided in Congress), two major market issues.
Which economic sectors would benefit from Trump’s election? According to our expert, these are the heavy sectors of the traditional American economy: fossil fuels, steel and defense – automatically reinforced by the tense international geopolitical context.
Swiss
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