US PRESIDENTIAL ELECTION
The US presidential election scheduled for 3 November 2020 has the potential to witness increased market volatility and have significant ramifications for investors.
US PRESIDENTIAL ELECTION
The US presidential election scheduled for 3 November 2020 has the potential to witness increased market volatility and have significant ramifications for investors.
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America Votes Today!
KEY DATES IN THE US PRESIDENTIAL ELECTION
29
SEP
First debate
07
OCT
Vice-presidential debate
22
OCT
Final debate
03
NOV
Election day
The potential impact on markets depends on the policies employed by the next administration. Both parties' US election campaigns are now in full swing. Depending on who wins the White House will have a very different political landscape, typically with different policies and priorities from government leaders - and in the eyes of the market, different means uncertainty.
As it's already known, the coronavirus pandemic has bought in looming uncertainty, and despite there is a rebound in markets, the economy has a very long way to go in its recovery. Anything could happen between now and Election Day.
WHO WILL WIN THE US PRESIDENTIAL ELECTION?
How current polls are projecting the outcome of the vote on 3rd November.
Click the map to create your own at 
If America Elects
Joe Biden
Joe Biden
If America Elects
Joe Biden
Joe Biden
Decrease in taxes on low and middle earners, increase in taxes on corporations, high-income individuals, possibly with changes to capital gains
Traditional, multinational approach to pushing back on China
Biden is likely to end the era of deregulation
Biden wants to strengthen Obamacare and limit drug prices
Investments in clean energy and not produce any carbon by the year 2035
If America Re-elects
Donald Trump
Donald Trump
If America Re-elects
Donald Trump
Donald Trump
No new higher taxes
Less regulation
Continued tough negotiations with China
Building the wall and curbing immigration
Lower drug costs, terminate the Affordable Care Act
Potential opportunities to consider
The US election is set to have a huge impact. What effect will the election result have on the markets you trade?
First one is a Trump sweep with Republicans in control of both Senate and House of Representatives.
Corporate friendly regulatory environment is likely to continue.
Big technology companies, Defense, Banks and Energy companies will benefit from this scenario.
Republicans are generally considered as more lenient towards regulatory and taxation policies.
Pro-business policies of Trump administration means US small businesses also will benefit.
These themes can be captured by Invesco QQQ Trust Series I (QQQ), Financial Select Sector SPDR (XLF), iShares U.S. Aerospace & Defense ETF (ITA) and iShares Russell 2000 Growth ETF (IWO).
One negative factor of Trump re-election is rise in trade tensions with China and this can negatively affect SPDR S&P Retail ETF (XRT).
The second probable outcome is a Joe Biden win with Democrats sweeping both the Senate and House of Representatives.
Raise of corporate taxes as well as top personal income tax rate and this could lead to a decline in the markets.
Gig economy companies like Uber and labor intensive firms like McDonalds could see a fall in profit margins with increase in minimum wages.
More investment in infrastructure and clean energy companies also could see a rise in share price due to Democrat environmental agenda.
More liberal approach towards use of Cannabis.
The ETFs to watch out are iShares Global Clean Energy ETF, ETFMG Alternative Harvest ETF (MJ) and Global X US Infrastructure Dev ETF (PAVE).
The third possible outcome is Joe Biden winning but Republicans keeping the Senate.
This could be the most bullish scenario for stocks as a historical analysis shows that a Democrat President with split Congress has delivered an average 8 per cent annual gain for Dow Jones Industrial Average.
Even if there is a Democrat sweep and markets fall 4-5 per cent, that might likely be an opportunity for markets since the monetary policy of Federal Reserve is pretty dovish.
Also, Democrat administrations tend to have more government spending which should put a floor for stock market prices.
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Trading in financial markets involves significant risk of loss which can exceed deposits and may not be suitable for all investors. Before trading, please ensure that you
fully understand the risks involved
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