US Presidential Elections 2024: The equity markets continue to be volatile and one key event being watched out is the US presidential election. As investors watch and assess potential market reaction and likely winner, analysts share their expectations for the market performance, regardless of whether Donald Trump or Kamala Harris wins.
Investors are increasingly focusing on the dynamics of the budget deficit, said Alex Kuptsikevich, Chief Market Analyst at FxPro.
“A couple of years ago, markets chastised the UK for announcing 'unfunded' tax cuts. The same could be happening in the US. We do not rule out the possibility that the persistent fall in bond prices (rising yields) and the pull on the dollar and gold since September are a manifestation of concern about this issue,” said Kuptsikevich. The candidates are avoiding this uncomfortable topic but will surely return to it immediately after the victory speech, he further said, adding that there is potential for volatility in the first few days after the election.
Stock indices tend to rally soon after an election, after a period of sluggishness in the weeks leading up to it, he observed. But it's worth noting that in previous elections, equity indices have corrected more deeply and accelerated higher than we've seen now, Kuptsikevich added.
“A repeat of all-time highs is likely, but it's hardly reasonable to expect 10% or 15% gains for the rest of the year after election day, as we saw in 2016 and 2020, or even 7%, as was the case in 2012,” said Kuptsikevich.
With regards to the direct impact on India, Chokkalingam G Founder, Equinomics Research Pvt Ltd does not expect a significant change in the India-US relationship. The US cannot afford hostile relations with both China and India simultaneously and hence there may not be a direct impact of the elections on India, said Chokkalingam.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
