2020 US Presidential Elections and its effect on your trading
We are days away from the most important news affecting the financial markets nowadays. Which is the US Presidential Elections. The US Stock Markets declined from its record high in February 2020 by more than 35% in mid-March. The Covid-19 spread, and the temporary closure of businesses have caused millions of Americans to lose their jobs and file for unemployment. In this article we will shed light on the most important points you have to take in consideration when trading the financial markets during October 2020.
US Jobs
The Covid-19 spread and the temporary closure of businesses have caused millions of Americans to lose their jobs and file for unemployment. US Jobs creation policy file is in favour of the republicans as the president Donald Trump showed a very good figures in pre-covid economy and thus expectations that job market will get better if trump is winning the elections.
US China Trade War
The trade war between US and China was the main topic for all traders since president trump took office when the US levied hundreds of billions of dollars in tariffs on Chinese companies. In addition to other changes on trade deals with Canada and Mexico. The US/China Trade war file will be against the president Donald trump and thus this might be a significant reason of his failure.
Tax
The largest pieces of legislation passed under President Trump’s presidency was the 2017 Tax Cuts and Jobs Act. The legislation consisted of a large, permanent tax cut for corporations, and temporary cuts to individual taxes that will expire in 2025. These cut individual taxes largely for higher-income Americans, but introduced at least some level of tax cuts across the board. Joe Biden has proposed a tax plan that would raise taxes for wealthy Americans and tax long term capital gains at the same rate as normal income, going in the complete opposite direction as Trump’s tax plan. Therefore, the overall direction of tax policy in America could be at play this election and this will affect the Big Companies financial sheets and thus the prices.
Technology Sector
President Trump has long railed against large tech companies for what he perceives as a bias against conservatives. This in fact is affecting the technology companies from time to time. Having Trump as a president will keep the pressure on the Giant Tech Companies.
In a nutshell
Those are the most points Traders should focus on when trading during elections. If Trump wins , this will result in better Job markets expectations , better balance sheets for US Companies. This will add positivity to wall street with cautions on tech sector.
On the other hand, Biden winning will release the China trade war & the Trump-Tech War but will put some challenges on job market & Taxes, this will result in negative future for the US companies and will result in a short term pressure on the markets.
