As the US presidential election approaches in November, financial analysts are predicting increased fluctuations in the stock market due to uncertainty surrounding future policies.
The investment bank advises clients not to make major changes to their long-term investment plans based solely on election results. However, she suggests investors consider election-related risks in their short-term decisions. “We expect stock market fluctuations to become more frequent as the election date gets closer, which is common due to uncertainty about future policies,” financial experts say.
The bank created two groups of stocks that are expected to perform well depending on the two most likely outcomes of the election: a President Trump victory with a Republican-controlled Congress or a Joe Biden victory with a no-party Congress. does not have control.
These actions are intended to serve as a benchmark for making investment decisions based on election predictions and to protect investments from risks that are directly related to the election.
Under a Trump presidency, priorities would include focusing on international trade relations, implementing higher import taxes and reducing government regulations. Raising import taxes could support local manufacturers in sectors such as steel, lumber, aluminum and solar panels.
Additionally, sectors such as traditional energy and finance could benefit from a less strict regulatory framework. “A softer approach to competition enforcement could lead to more mergers and acquisitions,” financial analysts suggest.
Analysts believe that if Joe Biden were to win a second term, his administration would likely maintain current policies, with the possibility of raising taxes on businesses to fund government spending if the Democratic Party gains control of the Senate and House representatives. The bank, however, believes that this outcome is unlikely.
The bank says a Biden victory with a Congress where no party holds a majority would depend on presidential orders and regulatory agencies to advance climate change initiatives. Recent U.S. Supreme Court rulings that limit the power of federal agencies to enforce regulations could restrict the extent to which Mr. Biden can implement his policies without support from Congress.
The bank cautions investors against making investment choices based on specific predictions of the election outcome due to the high level of uncertainty. Instead, she advises maintaining the ability to update investment strategies as new information becomes available.
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