Reported about 1 year ago
On July 7, 2024, Taipei - American voters are faced with two major political parties with vastly different platforms and must choose between two presidential candidates. Foreign corporations predict greater market changes post-election, with individual stock trends determined by profitability. Analyst Raheel Siddiqui from LPL Financial notes that the S&P 500 index performance in election years post WWII reveals differences in performance depending on the election competitiveness; in more competitive years, economic conditions and business cycles seem to dictate market performance, steadily rising over the year. However, in close election years, trends rise steadily until September, then notably decline and become more volatile. Despite a post-election recovery after clear results, the median drop from peak to trough is around 3%. LPL highlights that this super election year may trigger financial market disturbances, with localized volatility surpassing expectations. Given historical patterns, this local volatility spreading globally carries heightened risk, exacerbated by short-term tail risks, resulting in enhanced future volatility. Franklin Templeton's bond investment team notes that regardless of the election outcome, a divided Congress may constrain the new president from overly aggressive policies. If Trump is re-elected, tax cuts, deregulation, and economic focus are likely, but his disruptive style and foreign policies may cause market fluctuations. Meanwhile, a Biden reelection might bring lower uncertainty. Consequently, many corporations suggest a neutral stance in current markets and continue seeking adequate risk-distribution tools for investment portfolios. Fidelity believes that regardless of the US election result, most developed markets show upward stock trends, where factors like economics, geopolitics, or external events have more direct and lasting impacts; in the long term, company profitability is the most influential factor on stock trends, ensuring sustained upward movement for stocks with supported earnings.
Source: YAHOO