This comes at a time when the financial and oil markets are volatile in the wake of Donald Trump declaring his victory in the elections even before the completion of the full count of votes.
Although Republican President Donald Trump provided the financial sector with massive tax breaks and loosening regulatory gains, his first term in office was characterized by uncertainty and volatility, especially in terms of international trade.
Who will prevail?
Wall Street has tilted to the left in the current election, with Democratic candidate Joe Biden outpacing Trump in raising money from the financial sector.
Although many CEOs have said that they do not support all Biden’s policies, they believe that it will be easier to anticipate his steps and that it will be better for the country.
Anthony Scaramucci, a hedge fund executive who spent 11 days as Trump’s communications director in 2017, said the competition was likely to be tougher than he initially expected, but he still expected Biden to win. Scaramucci voted for the Democratic candidate in this election. “Yes, he can win and that will be very good for stocks,” he added.
The Standard & Poor’s 500 indexes rose 48.8% during Trump’s presidency, which Trump refers to a lot as a measure of success.
On the policy front, the Trump administration has focused on cutting taxes, easing regulatory restrictions, and reconsidering the United States’ position in international trade agreements with the goal of supporting domestic manufacturing.
As for Biden, he called for an increase in corporate taxes, tighter regulatory restrictions, and less competition with trading partners.
US media indicated that US equity futures swung dramatically early Wednesday, with the prospects of a quick settlement of the election result declining.
President Donald Trump’s allegations about the incorrectness of the vote – according to the media – helped create a state of suspicion among investors of what may be a hectic election race, which was reflected in futures contracts for indices such as Dow Jones, which fell more than 1.5% after the statements. Trump.
The main US stock indices opened higher today, Wednesday, after the result of the race towards the White House became far from expectations, but investors are still concerned about the possibility of conflict over the outcome.
The Dow Jones Industrial Average index rose 0.12% to 27,512.83 points, and the S&P 500 opened 1.11% higher to 3,406.46 points, while the NASDAQ Composite Index increased by 2. 54%, to settle at 11 thousand and 443.78 points.
US stocks closed higher on Tuesday by 2%, at a time when investors bet that the US elections will be resolved without entering into a long process, leading to a quick deal on more fiscal stimulus.
Japanese stocks rose on Wednesday as markets cautiously watch the results of the US presidential election, while gains were limited.
The Nikkei index rose the Nikkei) 1.72%) to close at 23 thousand and 695.23 points, erasing part of the early gains, which exceeded 2% and touching the highest level since February last. The broader TOPIX index also gained 1.2%, rising to 1627.25 points.
“Although the result is still not resolved, stocks seem to be moving in the direction of taking into account a greater likelihood of Trump winning,” said Fumio Matsumoto, an expert at Okasan Securities.
European stocks achieved tangible gains during trading today, Wednesday, thanks to the strong start of American stocks, and the rise of most Asian stock markets, despite the ambiguity surrounding the results of the US presidential elections.
The European stocks had started trading today on a sharp decline, then recovered their losses, ending the Stoxx 50 index of European stocks of excellent trading today, up more than 2% to reach 3161.07 points.
While the main DAX index of the German Frankfurt Stock Exchange increased by 1.95% at the close of trading, the CAC 40 index of French stocks rose by 2.44%, and the FTSE 100 index of the London Stock Exchange by 1.67%.
Gulf Stock Exchanges
Most of the stock markets in the Middle East rose on Wednesday, tracking the increase in oil prices.
The main Saudi index advanced 1.1%, the main index of the Dubai Stock Exchange gained 0.7%, and the Abu Dhabi Stock Exchange index rose 0.9%.
In Qatar, the index increased by 0.3%, supported by the profit of Qatar Fuel Company 1.5%. Outside the Gulf region, the leading stocks index in Egypt rose 0.4%.
Oil markets are tumbling
Oil prices fell today, Wednesday – before returning to gains again – after Trump announced his victory in the elections, despite the failure to complete the counting of millions of votes at a time when the final results are not expected to be announced until days later.
US West Texas Intermediate crude fell 0.4% to $ 37.5 a barrel by 8:00 GMT, before rising again and earning one dollar.
Brent crude fell about 0.2% to $ 39.6, before reducing its losses again, and climbing above $ 40 a barrel during trading on Wednesday.
Oil prices fell more than 10% last week with the increase in infections with the Coronavirus, and further restrictions on movement were imposed, which hurt the outlook for demand. Oil prices nearly offset those losses in 3-day gains this week before the election.
Donald Trump’s second term victory is seen as a driver of the rise in oil prices due to his tough stance on Iran.
Tips for dealers
In a report in the American newspaper “The Hill”, writer Nicholas Sargin provided a number of advice to investors, asking them to exercise caution once the results of the US elections are known.
The writer advised not to exaggerate the reaction to the announcement of the winner, noting that many people believed that Trump’s victory in 2016 would lead to the collapse of the stock market, as the primary market response was a drop in the Dow Jones Industrial Average by nearly 900 points. This was followed by a massive recovery that continued into 2018, as investors predicted that tax cuts and deregulation would lead to stronger economic growth.
The writer called for focusing on the potential economic policies that will be enacted, noting that there is often some manipulation in the details, and he said that at this stage it will be premature to know the legislation that will be issued, and what will be deleted or abandoned, and here the importance of the election results appears. Congress.
He also advised maintaining objectivity and not allowing political convictions to influence the investment decision.
He pointed out that although the stock market reacted positively to the possibility of tax cuts and deregulation 4 years ago, the trade war with China contributed to increased market volatility, adding that people are more likely to make better investment decisions if they are flexible and open to a range of possibilities. Then if they were strict in their belief about what was going to happen.
Source : Al-Jazeera + the American press + agencies