Still, under those circumstances, if there is a Trump victory: Expect more and higher tariffs, which could disrupt trade and be inflationary, and hurt “the consumer discretionary, industrial and information technology sectors,” in the opinion of UBS, the financial services sector. company. Trump would likely succeed in cutting taxes and increasing the budget deficit, stimulating the economy but, again, increasing inflation, which could lead to higher interest rates. There is likely to be less regulation, which will benefit sectors such as fossil fuel-based energy and financial services.
If Biden is re-elected but Democrats do not control Congress, the status quo will continue. Greater regulation (although on Friday the Supreme Court limited the executive branch’s regulatory powers) and higher taxes on wealthy individuals and companies than under the Trump administration are expected, along with executive orders that help “businesses in the sectors industrial, materials and public services focused on renewable energy and energy efficiency,” according to UBS.
A landslide victory that gives control of both the White House and Congress to either party would be unexpected and could disrupt markets. Biden could accomplish legislative feats that have been beyond his reach. He increases the likelihood of tax increases for the wealthy and corporations. The chances of positive results for clean energy companies increase, while banks and fossil fuel companies will have a harder time, or at least that’s what Wall Street thinks.
A landslide victory for Trump would be the most troubling outcome from a purely financial standpoint because it could impose policies that could radically change the way business has been done and life has been run in the United States. The New York Times covers plans underway for a second Trump administration. I won’t go into details here.
Neither a landslide victory for Trump — or a Democratic one — “has been priced into the markets,” Anthony Saglimbene, chief market strategist at Ameriprise Financial, said in a briefing for reporters. “If we wake up on November 6th and it looks like we have one-party control of Congress, I would expect volatility to increase.” But he added that markets are likely to recover quickly. History tells us, Saglimbene said, that the market will refocus on interest rates and corporate profits “once the election cycle passes.”
