The U.S. stock market, which has so far shown a rapid, sharp, and impressive recovery from the COVID-19 pandemic, is expected to be more affected by the vaccine’s launch than by the presidential election.
– Donald Trump, President of the United States
In terms of foreign policy, there may be an impact on countries in the Middle East. At the level of the American citizen, who is far more interested in domestic relations than he is in foreign relations, a Democratic or Republican president does not constitute a dramatic change.
In the economic aspect of COVID-19 effects, no matter which presidential candidate is elected, he will continue to pour money into the economy until the market is in recovery mode. We will pay it back through taxation and interest payments on debt. Even a close election result, which could lead to an appeal to the U.S. Supreme Court, would create a limbo for two to three weeks, and once the final winner is announced, the election results would be a done deal.
In terms of foreign policy, there may be an impact on countries in the Middle East. At the level of the American citizen, who is far more interested in domestic relations than he is in foreign relations, a Democratic or Republican president does not constitute a dramatic change.
In the economic aspect of COVID-19 effects, no matter which presidential candidate is elected, he will continue to pour money into the economy until the market is in recovery mode. We will pay it back through taxation and interest payments on debt. Even a close election result, which could lead to an appeal to the U.S. Supreme Court, would create a limbo for two to three weeks, and once the final winner is announced, the election results would be a done deal.
Between Europe and the United States
The U.S. stock market, which has so far shown a quick and impressive recovery from the pandemic, is expected to be affected by the vaccine’s release more than the winning candidate’s identity in the presidential election. As long as there is government support, and U.S. citizens are not required to break savings and withdraw money from the capital market to support living expenses, markets are not expected to collapse.
What will happen when retiring American citizens will find that the low yield in the bond market requires them to withdraw from their savings to maintain the standard of living that they are accustomed to?
This is a question for the future, and it is less relevant to 2020 election.
The pandemic does not discriminate between countries.
The election is in less than two weeks. The government change will take place on the date of the U.S. President’s swearing-in on January 20, 2021. From November 3, 2020 to January 20, 2021 may be a volatile market.
Examining the market’s direction since the end of March 2020 indicates that once central banks have begun to aggressively and actively intervene in the markets, investors divert investments from one country to another. From one branch of activity to another, there will be a continuation of riding the bull market.
This phenomenon is likely to occur even after the U.S. election results come in, whatever they may be. Given that funds are diverted between markets, U.S. investments will not be diverted to risky countries. Investors are not shifting huge investments from the U.S. to Venezuela, for example. Big U.S. investments can only be diverted to markets of the same size, such as the European market.
From the beginning of the third quarter until now, the U.S. stock indices S&P 500 and Dow Jones have risen by about 10.5%, while the European Euro Stoxx 50 and Stoxx 600 indices showed a negative return.
Given the uncertainty in the U.S. in light of the election, it would not be out of place to assume that European capital markets will show an excess return over the U.S. in the near future.
All this is in assumption that COVID-19 does not create a difference between the U.S. and Europe. COVID-19 does not discriminate between countries, nations, or religions. COVID-19 expected to act the same on both continents. The only difference will be the U.S. political uncertainty.
Last Friday, the showdown between the two U.S. presidential candidates took place. Compared to the previous ones, a considerable part of the voters has already voted in this election. For those who have not yet voted, the presidential showdown was not relevant; the conflict does not cause a political party’s transition.
The “swing state” attitude is to convince voters who do not support any candidate or stay home.
In this respect, both candidates attempt to make the undecided voters stay home.
Don’t play to their wish. U.S. citizens need to vote. We all have families who we need to support and care for. VOTE.
