KYArticles (4)
What investors need to know after the Harris-Trump debate: Sectors to watch
<p>The first presidential debate between Vice President Kamala Harris and former President Donald Trump took place last night at the National Constitution Center in Philadelphia. While the market response was relatively muted – given that most policies had been previously announced – some sectors did see some movement, particularly in the crypto space.</p> <p>Crypto holders, in particular, expressed disappointment as neither candidate addressed the issue of cryptocurrency regulation, which had been a point of interest. Trump's known support for making the US a crypto powerhouse and Harris' softened stance made the lack of crypto discussion notable, leading to a slight drop in Bitcoin’s price following the debate.</p> <p>While no significant new policies were announced, the debate provided insights into what each candidate's administration might focus on in the future. Kamala Harris positioned herself as a champion for middle-class families, proposing the extension of the child tax credit and a $50,000 tax deduction for small business startups. Her economic policy largely revolves around supporting small businesses and middle-income earners, which contrasts with Trump's approach, which she claims benefits billionaires and large corporations through substantial tax cuts.</p> <p>Trump, on the other hand, emphasised his ongoing trade war strategy, mainly targeting China. He reiterated plans to impose tariffs on imports to protect US domestic production, a move aimed at curbing the trade deficit. However, as economists have pointed out, such a policy could lead to higher inflation in the short term, with the increased costs of tariffs potentially passed on to consumers. This inflationary pressure could have ripple effects on various sectors, including retail and manufacturing.</p> <p>Harris also addressed the issue of affordable housing, proposing tax credits and down payment assistance for first-time homebuyers. This kind of policy has been tried in the UK, which led to a surge in housing prices, though it didn't necessarily result in more homes being built.</p> <h2>Housing Market Impact</h2> <p>Several housing and real estate companies could benefit from Harris' proposed policies. Builders like <strong>Lennar Corporation</strong> and <strong>D.R. Horton</strong>, two of the largest homebuilders in the U.S., could see increased demand for new homes if more first-time buyers enter the market. Additionally, real estate investment trusts (REITs) like <strong>Equity Residential</strong> could see a positive impact as housing demand strengthens.</p> <p>Harris's proposals on healthcare are also critical to her platform. She aims to expand the Affordable Care Act (ACA), protect pre-existing conditions, and allow Medicare to negotiate drug prices, which could significantly affect the healthcare sector.</p> <h2>Healthcare Sector Impact</h2> <p>Healthcare companies that deal with Medicare, such as <strong>UnitedHealth Group</strong> and <strong>Humana</strong>, could be positively or negatively affected depending on policy implementation. Drug manufacturers like <strong>Pfizer</strong> and <strong>Merck</strong> may face pressure due to Medicare's ability to negotiate drug prices, potentially lowering their revenue from government contracts. However, companies that provide lower-cost drugs or alternatives might see increased demand if patients and providers seek more affordable treatments.</p> <p>Harris also reiterated her stance on clean energy investments. The US government has supported significant companies like Tesla through tax breaks, boosting the electric vehicle (EV) market. Harris plans to continue supporting clean energy but has also expressed support for increasing domestic gas production, which could influence voting in swing states like Texas and Pennsylvaniawith solid fossil fuel industries.</p> <h2>Tesla and Domestic Gas Production</h2> <p>Tesla has benefited significantly from US tax breaks and incentives for clean energy. For example, Tesla received around $1.5 billion in environmental regulatory credits in 2021, which boosted its profitability. Continuing such policies under a Harris administration would further benefit companies like Tesla. However, Harris' support for domestic gas production signals a balancing act to appeal to voters in swing states like Pennsylvania and Texas. If policies favour fossil fuel exploration in those areas, gas producers like <strong>ExxonMobil</strong> and <strong>Chevron</strong> could benefit from increased domestic gas production.</p> <p>On the other side, Trump has remained consistent with his opposition to clean energy initiatives like wind and solar, preferring to focus on fossil fuels and fracking. He has criticised wind and solar as inefficient and wants to boost fossil fuel production for energy independence.</p> <h2>Energy Sector Impact</h2> <p>If Trump were to return to office, his energy policies could negatively impact wind and solar power companies, such as <strong>NextEra Energy and First Solar</strong>. These companies have thrived under government support for renewable energy but could face headwinds under a Trump administration. On the other hand, fossil fuel companies like <strong>Halliburton</strong>, which provides services for fracking, and <strong>Occidental Petroleum</strong> could benefit from a resurgence in US oil and gas production.</p> <p>Trump's proposed immigration policies, which involve large-scale deportations and increased use of local police and military forces, could also impact private companies involved in security and border management. Companies such as <strong>GEO Group</strong>, which operates private detention centres, and <strong>CoreCivic</strong>, a principal private prison contractor, could see increased demand for their services.</p> <p>Lastly, Trump's focus on reducing the trade deficit with China through tariffs could profoundly affect the US dollar. If tariffs are increased significantly, it could strengthen the dollar in the short term as imports become more expensive. However, the long-term effects might lead to inflation, weakening the dollar if consumer spending slows and prices rise.</p> <p>What is your take on the US presidential election? Take a position on a wide range of US stocks today with a ThinkMarkets live trading account.<br /> </p>
How do the US presidential elections affect the markets?
<p>The US presidential elections have global implications that affect the financial markets. Traders often consider this period as a time of volatility and opportunity.</p> <p>Check out which markets receive the most impact so you can prepare your trades.</p> <h2>Forex</h2> <p>One of the most directly affected by presidential elections is the forex market.</p> <p>In the US, while the Federal Reserve is independent, the sitting US president can still exert political pressure on the Federal Open Market Committee (FOMC) to get the monetary policy that aligns well with their vision.</p> <h2>EUR/USD</h2> <p>The global sentiment on candidates and the eventual winner directly correlates to the perceived strength of the country’s currency. US candidates appearing weak can cast doubts on the future of the dollar. For instance, the general consensus right now is that a Trump return would result in a lower dollar and a rise in EUR/USD.</p> <p>The policies proposed by presidential candidates can significantly influence the EUR/USD pair. For example, expansionary fiscal policies might strengthen the USD, causing the EUR/USD to tumble.</p> <p>Elections bring uncertainty, leading to volatility in EUR/USD as traders react to the latest polls and candidate statements. Take note of the dates above to plan your trades.</p> <h2>GBP/USD</h2> <p>The election outcome can shape US-UK relations, impacting trade agreements and economic policies, thus affecting GBP/USD. With the US president having a direct hand to play in international relations, UK-leaning candidates can cause GBP to strengthen.</p> <h2>Other USD pairs</h2> <p>Other currency pairs involving the USD respond to changes in global perception of the dollar, which can be influenced by election outcomes. If the US presidential elections are boosting investor sentiment on the dollar, forex pairs with USD as the base currency, i.e. USD/JPY, are likely to increase. Meanwhile, currency pairs with USD as the quote currency, i.e. EUR/USD, will likely decrease. The opposite holds true if the elections go sideways and investors choose to abandon the dollar.</p> <h2>US stocks</h2> <p>The US presidential elections can significantly affect various sectors of the stock market based on the policy suggestions of the candidates.</p> <h2>Healthcare sector</h2> <p>Policies related to healthcare reform or pharmaceutical regulations can impact healthcare stocks. A candidate favouring stringent healthcare regulations might lead to a decline in pharmaceutical stocks.</p> <h2>Energy sector</h2> <p>Proposals regarding the regulation of renewable energy or fossil fuels can lead to market volatility on energy stocks. A candidate promoting green energy might boost renewable energy stocks while potentially negatively impacting traditional energy companies. This may also affect commodities, such as WTI and BRENT.</p> <h2>Technology sector</h2> <p>Tech stocks may be influenced by policies regarding data privacy, antitrust issues, or trade relations with countries important to tech supply chains.</p> <p>Proposals regarding international trade, especially with tech-heavy regions like Asia, can have a significant impact. For instance, a candidate proposing strict trade policies or tariffs could lead to volatility in tech stocks, affecting companies reliant on global supply chains. Additionally, policies around data privacy and cybersecurity can influence investor confidence in tech companies, particularly those handling large amounts of user data.</p> <h2>Financial sector</h2> <p>The financial sector is sensitive to proposed changes in banking regulations and fiscal policies. A candidate advocating for tighter financial regulations may negatively impact banking stocks, as increased oversight could lead to higher operational costs.</p> <p>Conversely, proposals for deregulation or tax reforms could boost investor sentiment in financial stocks, as these changes could potentially increase profitability for financial institutions.</p> <h2>Global stocks</h2> <p>The policies of the US administration can influence international trade, economic policies, and geopolitical stability.</p> <p>The stance of the US on trade agreements can affect global markets. Protectionist policies might lead to trade wars, impacting global supply chains and the stock prices of companies reliant on international trade.</p> <p>The fiscal and monetary policies proposed by candidates can influence global economic growth, which in turn affects global stock markets.</p> <p>Spot trading opportunities as they pop up with ThinkTrader Web’s multi-screen display. Monitor up to 8 instruments simultaneously for a lower chance of missing out on key events. Create an account today!</p>
How to trade the 2024 US Election: Analysing stock trends during the 2020 season
<p>It’s undeniable that election season plays a critical role in shaping the current and future economic landscape. In 2020, the US stock market, which has always been sensitive to political shifts, experienced a range of movements that reflects the uncertainty and anticipation surrounding the election results.</p> <p>In this article, we will go through the historical price movements of the US stock market during the 2020 US elections, offering traders a comprehensive overview of how elections can influence investor behaviour, market sentiment, and stock performance.</p> <p>Held on November 3, 2020, the most recent US presidential election was one of the most closely followed elections in modern history. Despite the COVID-19 pandemic, the elections showcasing the battle between Donald Trump and Joe Biden, saw unprecedented levels of voter turnout and a significant increase in mail-in voting.</p> <p>The election cycle was marked by intense debates, significant public and media scrutiny, and a deeply polarised electorate. Key issues dominating the campaign trails included the management of the COVID-19 pandemic, economic recovery plans, racial justice, and climate change policy. These themes not only influenced American public opinion but also had global stakeholders keenly watching, given the potential shifts in US foreign policy and international trade agreements.</p> <p>The months and weeks following Election Day had the financial markets reacting to every major development, from campaign speeches to proposed policies on taxes, regulation, and public spending.</p> <p>Market sentiment was particularly sensitive to polling data, swinging between optimism and caution as the lead between candidates narrowed or widened according to different polls.</p> <p>This election was also notable for its prolonged ballot counting process, primarily due to the surge in mail-in votes. The uncertainty about the outcome led to heightened market volatility, as participants awaited clear signals on the direction of US policy for the next four years.</p> <p>In the months leading up to the 2020 US elections, the stock market exhibited significant volatility, influenced by both election-related developments and the ongoing global pandemic.</p> <h3>Market conditions leading up to the US election (August – October 2020)</h3> <h4>SPX500</h4> <p><img alt="" src="/getmedia/e2110252-26ce-4f00-898e-eded9ba37732/Academy-US-Elections-How-to-trade-2024-election-SPX500.png" /></p> <p>During this period, the S&P 500 (SPX 500) saw fluctuations that could be attributed to the presidential campaigns and public opinion polls. For instance, the index experienced a decline of about 10% in September, primarily due to uncertainties over election outcomes and fears of a contested result.</p> <h3>Market movements in various sectors</h3> <h4>Technology sector</h4> <p><img alt="" src="/getmedia/b92df36d-a0ff-4ae8-9105-6e506052f1ef/Academy-US-Elections-How-to-trade-2024-election-Technology-sector.png" /></p> <p>Tech stocks, like Apple (AAPL) and Amazon (AMZN), reacted to the prospects of increased regulatory scrutiny proposed by both candidates. For instance, Apple stock dropped by as much as 24%. US presidential candidates discussing the tightening of policies around tech can lead to market uncertainty, which often results in price swings.</p> <h3>Healthcare sector</h3> <p><img alt="" src="/getmedia/b4289eab-6dd5-4157-9b37-7b67e451e767/Academy-US-Elections-How-to-trade-2024-election-Healthcare-sector.png" /></p> <p>With COVID-19 a major issue in 2020, healthcare stocks were heavily affected by election rhetoric around healthcare policies. Aside from the issues regarding public healthcare and insurance, the COVID-19 vaccine development also affected how healthcare stocks were priced.</p> <p>As an example, Pfizer (PFE), one of the pioneers of the COVID-19 vaccine research experienced volatile times as the stock price went through massive gains and losses, as the public reacted to the vaccine development process and the political debate over healthcare management.</p> <h3>Economic Data and Election Polling</h3> <p><img alt="" src="/getmedia/f14a96bb-92bf-46da-b933-802720f87932/Academy-US-Elections-How-to-trade-2024-election-Economic-data.png" /></p> <p>Economic indicators and election polling data also played a role in how the stock markets moved. Positive economic data released in early October 2020 provided a temporary uplift to the US stock market, aiding in a recovery of earlier losses. However, as polling data showed a tight race, volatility increased once again, highlighting the markets’ sensitivity to political events.</p> <h3>Election Week Volatility</h3> <p>The week of the US presidential election in 2020 was marked by intense volatility in the stock market, as investors navigated the uncertainties of a hotly contested election. This period was characterised by sharp swings in major indices, reflecting the market's reaction to incoming results and the evolving political landscape.</p> <h3>Daily market movements during Elections Week</h3> <h4>SPX500</h4> <p><img alt="" src="/getmedia/93bb5073-c72a-4d5b-b717-12ba24030083/Academy-US-Elections-How-to-trade-2024-election-SPX500-daily.png" /></p> <h4>US30</h4> <p><img alt="" src="/getmedia/a9ad95ea-3219-446e-9378-25896e753263/Academy-US-Elections-How-to-trade-2024-election-US30-daily.png" /></p> <h3>November 3, 2020 (Election Day)</h3> <p>Contrary to expectations of a bearish market, the US stock market rallied. The Standard and Poor’s 500 Index (SPX500) rallied by 2.7% while the Dow Jones Industrial Average (US30) surged by 3%. This price increase reflected the public’s optimism about a clear election outcome.</p> <h3>November 4, 2020</h3> <p>As the vote counting continued and no clear winner emerged, markets maintained their upward trajectory amidst the uncertainty. Buoyed by large tech stocks, US indices performed strongly as investors bet on the continuation of policies favorable to big tech.</p> <h3>November 5 – 6, 2020</h3> <p>As the winner of the US elections become more apparent, the markets continued to rally, showing the public’s confidence in Joe Biden. It's worth noting that investor confidence could also be attributed to a potentially divided government that would be less likely to implement significant regulatory changes.</p> <h3>Market sentiment and external factors</h3> <p>It’s worth noting that the market’s resilience during Elections week was also supported by other factors, such as the Federal Reserve's commitment to maintaining an accommodative monetary policy and positive news regarding COVID-19 vaccine trials, which provided an additional boost to investor sentiment.</p> <p>Traders must consider that investors are quick to adjust their positions based on the latest news, demonstrating a clear sensitivity to the real-time developments in the electoral process. If you’re thinking of trading the 2024 US election season, it’s important to stay up to date with the latest market news and political events that can have a significant sway in market behaviour.</p> <h3>Post-election market reactions</h3> <p>Following the confirmation of Joe Biden as the President-elect in November 2020, the US stock market responded with an overall upward trajectory, reflecting relief and clarity among investors about the future political and economic landscape.</p> <p><img alt="" src="/getmedia/a30883bd-0011-4b9c-8538-355484b59c3d/Academy-US-Elections-How-to-trade-2024-election-post-election-market.png" /></p> <p>A week following the 2020 US election, major indices such as the SPX500 and the US 30 saw significant gains and reached new heights. By the second week of November, the SPX500 index rose by 12% from its November opening price, while the Dow saw a 14.5% surge.</p> <p>This could be due to investors anticipating a more stable and predictable policy environment under the Biden administration.</p> <h3>Strategic insights for the 2024 US elections</h3> <ul> <li><strong>Diversification</strong><br /> In trading, a diversified portfolio is important in hedging against sector-specific risks during elections. For stock traders, balancing your positions between technology, renewable energy, and healthcare can mitigate adverse impacts from sudden policy shifts. Some traders also dip their toes in other markets such as forex to hedge against huge shifts in the US stock market.</li> <br /> <li><strong>Market timing</strong><br /> The US election season is filled with short-term market fluctuations caused by election-related news. This initial public reaction allows for market opportunities to appear that traders can capitalise on. Make sure to plan your trades in advance and stay updated with market news to maximise these volatility spikes.</li> </ul> <p>Keeping abreast of policy changes and proposed legislations during the election campaigns can offer early signals about which sectors might be favored or disadvantaged by the potential outcomes.</p> <p>Getting a comprehensive overview of the US stock market’s historical performance can help traders reach a more accurate prediction of how it would perform in the months leading to the 2024 US elections. With Joe Biden and Donald Trump locked in for another rematch, traders are closely watching how their proposed policies would affect market dynamics and investor sentiment.</p> <p>Stay informed and strategically prepared with ThinkMarkets. Maximise ThinkTraders’ extensive suite of analytical tools, price alerts, and exclusive features to seize opportunities that arise from the 2024 US election season.</p> <p><a href="http://portal.thinkmarkets.com/">Open an account</a> now!</p>
Key events to watch out for during the 2024 US presidential election run
<h3>The 2024 US Presidential Election Timeline</h3> <p>The 2024 US presidential election is gearing up to be a pivotal moment in American politics. Traders and investors from all over the world have their eyes on key events that could potentially impact financial markets. In this article, we will outline the major events and provide a timeline to help you stay informed during this monumental political event.</p> <h3>January 2024: Early Speculation and Primary Debates</h3> <p>As the year begins, speculation about potential candidates for both major political parties will intensify. It is highly likely that there will be a repeat of the 2020 US elections with the Democrats fronted by current US president Joe Biden while the Republicans nominate Donald Trump as their standard bearer.</p> <p>However, some prominent figures in American politics have also stepped forward to put their hat in the ring. Below is a list of candidates, as of January 2024:</p> <p><strong>Democrat</strong></p> <table> <tbody> <tr> <td>Joseph Biden Jr.</td> <td>Marianne Williamson</td> <td>Dean Phillips</td> </tr> </tbody> </table> <p><strong>Republican</strong></p> <table> <tbody> <tr> <td>Donald Trump</td> <td>Nikki Haley</td> <td> </td> <td>Asa Hutchinson</td> </tr> <tr> <td>Ryan Binkley</td> <td>Ron DeSantis</td> <td>Chris Christie</td> <td> </td> </tr> </tbody> </table> <p><strong>Independent</strong></p> <table> <tbody> <tr> <td>Robert Kennedy Jr.</td> <td>Cornel West</td> <td>Jill Stein</td> </tr> </tbody> </table> <p>Keep an eye out for the primary debates. These debates are a candidate’s first chance to showcase their platforms and engage with voters. Take note of their proposed policies and which sectors they’re leaning towards or moving away from as the markets tend to react as candidates gain popularity.</p> <p>Let's look at a possible scenario where a candidate proposing protectionist policies aimed at restricting international trade to protect US companies wins voter polls and surveys. Protectionist policies often include imposing tariffs on imported goods and renegotiating international trade agreements.</p> <p>The possibility of a protectionist US president creates uncertainty in the global economy. Investors are likely to turn to safe-haven assets such as gold or the Japanese yen to mitigate risk. The price of XAUUSD may see an uptick while currency pairs like USD/JPY may experience a tumble as demand for the Japanese yen increases.</p> <p>Protectionist policies may also affect the commodities market, specifically oil and agricultural products, which are dependent on international demand. As investors expect potential disruptions in global trade, there may be a drop in commodity prices.</p> <h3>July 15-18, 2024: Republican Party Convention</h3> <p>The Republican National Convention is scheduled for July 15-18, 2024, at the Fiserv Forum in Milwaukee, Wisconsin. This event will serve as the official nomination ceremony of the Republican party’s presidential candidate.</p> <p>The convention usually sets the stage for the main campaign as the party unveils platforms and casts their votes.</p> <h3>August 19-22, 2024: Democratic Party Convention</h3> <p>As the Democrats currently hold the White House, it is tradition that the Democratic Party Convention is held after the Republicans. The Democrats are scheduled to convene on August 19 – 22, 2024 at the United Center in Chicago, Illinois.</p> <h3>September to October 2024: US Presidential Election Debates</h3> <p>One of the most anticipated events in any presidential election is the series of debates between the candidates. Typically, there are three presidential debates and one vice-presidential debate. These debates provide voters with an opportunity to see how candidates handle tough questions and articulate their positions on critical issues.</p> <p>See the timeline of debates below:</p> <table> <thead> <tr> <th>Debate</th> <th>Date</th> <th>Location</th> <th>Host</th> </tr> </thead> <tbody> <tr> <td>First Presidential Debate</td> <td>September 16, 2024</td> <td>San Marcos, Texas</td> <td>Texas State University</td> </tr> <tr> <td>Vice Presidential Debate</td> <td>September 25, 2024</td> <td>Easton, Pennsylvania</td> <td>Lafayette College</td> </tr> <tr> <td>Second Presidential Debate</td> <td>October 1, 2024</td> <td>Petersburg, Virginia</td> <td>Virginia State University</td> </tr> <tr> <td>Third Presidential Debate</td> <td>October 9, 2024</td> <td>Salt Lake City, Utah</td> <td>The University of Utah</td> </tr> </tbody> </table> <p>Not only US citizens, but traders worldwide, including those in the US, show keen interest in the presidential debates due to their potential impact on financial markets. Presidential candidates use these debates to convey their economic policies and ideologies, discussing topics such as taxation, climate change, and trade agreements.</p> <p>Depending on a candidate’s popularity, these proposed policies may cause sharp price movements in forex, stocks and commodities as investors deal with the potential consequences of a candidate’s economic agenda.</p> <p>Historically, forex, in particular, has proven itself to be highly sensitive to the US presidential debates. A candidate’s position on international trade, tariffs, and foreign policy can strengthen or weaken currencies. Traders often watch debates for suggestions of protectionism or support for open markets.</p> <h3>October 2024: Final Campaign Push</h3> <p>The month of October is when the campaign enters its final stretch. Candidates will crisscross the country, holding rallies, participating in town halls, and making their final pitch to voters. The majority of these events are highly publicised. Strong opinions voiced out by candidates are carefully analysed by traders and economists as they prepare for the possibility of a candidate’s triumph.</p> <h3>November 5, 2024: Election Day</h3> <p>As per the US government, Election Day is set as "the Tuesday next after the first Monday in November", making the 60th quadrennial presidential election fall on November 5. The US presidential election garners significant global attention, with many around the world closely following the results as voters head to the polls. Expect volatility during this period as expectations rise for a certain candidate to win.</p> <h3>December 2024: Electoral College Vote</h3> <p>While the popular vote is crucial, the US presidential election is determined by the Electoral College. In mid-December, electors from each state will convene to cast their votes for the next POTUS. However, from a market perspective, the biggest reaction is on the exit poll on the election day. We usually see new trends in stock indices and FX starting on this day.</p> <h3>January 2025: Inauguration Day</h3> <p>The presidential inauguration takes place the following year. Inauguration Day is when the newly elected president is sworn into office as the former president steps down.</p> <p>The US presidential elections open numerous opportunities for traders as the markets react to major news. Public appearances, debates, and even news articles can lead to major price swings in global markets.</p> <p>It is essential for traders to keep a record of these key events and the crucial issues discussed so they can stay ahead of the curve.</p> <p>Sign up for a trading account with ThinkMarkets to access excellent trading conditions, superior technology, real-time trading signals, and more. Trade the US presidential elections now!</p>
