Lots of mixed feelings are in the stock market as investors mull over the outcomes of the presidential race and affects that await the election. When it comes to economics, most investors are concerned about Biden's policies as they know Trump's basis of "being a good president" is to take a look at the stock market ever since he became president. In this article, I'm going to briefly go over both side's policies and how they could affect the market.
Politicians consider Joe Biden to be a moderate candidate, leaning towards the increase of taxes to pursue government projects. According to New York Post, Biden wants a lot more taxes to be implemented for the government to spend more money on American products and "support American jobs". He has several more policies regarding social injustice, capital punishment, etc., but we are focusing more on their economic plans as it takes precedent in the stock market.
What investors don't like about big tax increases is that it limits consumer spending. When more people begin to save, that means less money moves in the market. Now, taxes aren't a bad thing, but big money is not a fan. According to MarketWatch, Biden could take the tax cuts for the top 1% and use that money for his "Buy American" economic plan. Here's what MarketWatch thinks what could happen if Biden is elected:
Trump has been known for either being extremely loved or hated on both sides, but what he has done for the American economy has mainly received applause.
Donald Trump assigned tax cuts to wealthier individuals which has allowed them to put more money back in the stock market. The top 1% are usually people who own corporations and have lots of money to invest or even give to charity. What Wall Street likes about Trump is his tenacity to turn the economy into the best it can be. When you see his slogan, "Make America Great Again", it only seems like he means that for the economy. I don't agree with this policy, but when Trump attempted to get the market moving again after the crash in March/April, the Fed printed trillions for their own balance sheet where they purchased shares of stock. Wall Street loved hearing that as the market boomed back up to previous levels and the Nasdaq created a new high. I do think he did some good in signing a bill to help aid the unemployed, but printing so much money and lowering interest rates to essentially nothing was not a good move in my opinion.
The market clearly doesn't reflect the current economy in the US and times like this would be hard on any president. If Biden wins, he will inherit a poor economy and will have to be relied on to fix it. And the same goes for Trump, but it's all a matter on how one goes about repairing the economy according to investors. I tried to make this unbiased as possible, although I did give my opinion on the Fed's stimulus plan, but I've been bringing that up for so long now. Anyways, I expect to see a lot of volatility in the market regardless of who wins or loses. Just know that when the US markets are shaky, other countries may follow, and we could see some big moves on various currency pairs come election time.
Thanks for reading! If you are interested in joining our trading community, we have chat rooms, trade alerts from our top traders, and educational content. You can join using the link below, and get a discount on your membership.
Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
As this week comes to a close, we are looking ahead at future setups that could be some of the best opportunities for the next several trading sessions. Here are some pairs for next week that we are looking at. EUR/JPY Recent data has shown a slow down in the German manufacturing sector. With European […]
When it comes to testimonies, it's all in how you say it. Jerome Powell has to be very particular in the way he makes his statements and answers the ensuing questions. Here is what might be in store for the market in the coming days and weeks, and whether or not there will be more […]
The historically 'safe' currency to hold in times of recessions is in a unique situation now with a couple factors in place. Here is why the yen is stronger today as well as some trade setups that could push its value either up or down. Weaker Yen Now, Stronger Yen Later The Bank of Japan […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here