Dear readers, today is US Election Day (US time) as the United States chooses its next President. Overnight (Singapore time), US stocks closed higher on this important day as the Dow Jones, S&P 500 and the NASDAQ Composite closed 2.06%, 1.78% and 1.85% respectively higher. But as we have been reading from all the analysis articles, what’s next for the stocks markets could be of the following various scenarios.
First, if there is an unclear winner on Election Day or if the result of the Elections become protracted, US stocks markets could be impacted adversely. Also, if there are civil unrest arising from the election, the adverse impact could be even be more pronounced. I definitely agree with these scenarios. The longer that it takes for the next President to emerge, the longer the US market volatilities.
Second, if there is a clear winner, analysts said the volatilities arising from the US stocks elections to the US stocks markets may be fewer or at least would not that protracted. Well, I would agree only to a certain extent because if the US stocks markets have already priced in either a Trump or Biden win, when any of the candidate wins decisively, some of the investors may next liquidate their positions quickly for profit and exit the stocks markets. And thereafter, the US stocks markets would then focus on the other volatilities like Covid-19 to respond accordingly.
Some investors may be trading on the outcome of this US Presidential Election. For me, the Election is just one of the many macro factors that investors note and formulate their investing strategies accordingly.
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