As the US 2020 presidential elections head down to the wire, financial markets, like voters, want to know who becomes the next US president. Some speculators will benefit from increased stability and the globalist agenda likely to follow a Biden victory.
President Trump favoured a protectionist agenda, this had a spillover effect on the commodities (oil) and financial markets, during the last 4 years. His “American first” worldview ignited a trade war with China, hurting global trade flows and output growth.
The 2018 tax cuts drove US inflation northwards and triggered the Fed to hike rates, leading to a spike in bond yields. This resulted in net capital outflow from emerging markets. Similarly, geopolitical tension with Iran, OPEC criticism and energy policy also indirectly affected emerging markets, Nigeria inclusive.
Clearly, the Trump era came with a lot of uncertainties, but a Biden victory points to less uncertainty. Congress and the White House will be aligned on the direction and terms of a stimulus package which will reduce red-tape that has delayed previous packages.
Increased US consumption, at 10% of the global consumer market, could serve as a trigger for the global economy. This is also good news for the energy market. Regardless of the outcome, there will always be a play/opportunity for the financial markets.
United Capital Research