As I expected, at the beginning of trading in Europe, there is no certainty as to who will become the new president of the United States. The intoxicating optimism of Tuesday ended when investors started to sell off the previously purchased assets on Wednesday. For the futures and currencies, this process began immediately after the close of trading in the US.
Now all the investors’ attention is focused on the outcome of the election. Will it be Joe Biden, whose victory was predicted by the liberal media, or Donald Trump will remain in the presidency. According to calculations, the gap between the number of electors remains less noticeable, making the markets unnerving, producing high volatility without a definite direction of movement.
I believe that today such market behavior may persist and even continue tomorrow or until the end of this week if the elections’ result will be delayed. Uncertainty is the most influential factor in investor sentiment. What’s more important is the possible reaction of the markets after the election results. I believe that any certainty can lead to an increase in positive sentiment in the US financial market and European and Asian ones. Earlier, both Trump and the Democrats’ representatives announced their readiness to take new measures to support Americans and local business, which caused a rally in the stock markets and weakened the dollar. As it seems to me, the elected presidential candidate will return to this issue. It will become the basis for a new post-election rally in the US, accompanied by a weakening of the American currency.
What to expect soon
As for the more distant prospects, I believe that the markets will calm down and closely monitor the incoming economic data. In general, I expect that the positive sentiments will dominate the market.