It’s a known fact that every 4 years the US general presidential elections rock the stock markets. Considering the country’s economic and military power, the US presidential election is seen as the most important recurring political event globally. Most traders don’t like uncertainty, however in times like these volatile markets can be very profitable to traders who know how to profit from fluctuating stock prices. The outcome of the election widely affects the general markets around the world, with implications on major issues such as globalisation, COVID-19, climate change and many others. Both candidates have high approval ratings from their respective parties, President Trump at 85% from Republicans and Biden at 74% from Democrats. Historically, the Republican party has been considered more favourable to business and world markets. Even though there has been a shift the past 10 years, seeing Wall Street money flowing into Democrat candidates.
A brief intro of the US elections
Is this election a big deal?
The US economy is the world’s largest economy, with a GDP accounting to 16% of the global GDP. In addition to growth and employment, voters and investors will be paying attention to various policy matters that will affect those indicators going forward. Some of the main policies are on government spending and taxes, government debt, regulatory policies, foreign trade, interest rates and the federal reserve.
Trading Tips during the US Elections
-Set Price Alerts and notifications for significant price movements before, after and during the US elections
-Place close attention to market fluctuations weeks leading up to the elections
-Trade real-time and react to breaking election news by choosing one of our trusted brokers
-Be ready to open a long or short position whenever an opportunity arises.
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Overall the effect of the US elections on global economies will be very significant. Each presidential contender has his own policy preferences which widely influence the decisions that will be made during the next administration, and in turn, will influence the markets.
Investors should be prepared for a volatile and uncertain market, and also the possibility of a shorter or longer-term shift in the current market sentiment.