Political uncertainty is an additional factor traders have to cope with as neither former president Trump no Vice president Kamala Harris seem to have decisive lead over each other.
Markets dynamics so far conform to historical patterns: volatility around the election date. And quick return to normal after the election results are in is what past performance data indicate as the historical pattern to expect.
What actionable strategies can one employ then in the runup to elections?
The march of gold to new historical highs only benefits from additional uncertainty – so a reversal to upside momentum is not likely in coming days. Go gold bulls!
The dollar had a remarkable rebound in recent couple of weeks as investors reassessed the pace of further rate cuts by the Federal Reserve. Fed policy makers have spoken lately of continuing strength of US economy and labor market. It is likely the bullish pattern will hold for short term minimum
As to stock market, the quarterly earnings results from mega caps are the driving force currently. The stock benchmarks - SP500, Dow and Nasdaq - are trading down in recent days. Major positive reports can reverse the current bearish bias - maybe a blowout nonfarm payrolls report Friday will do the job! As to after election performance – there is no reason to not bet the US stock market will resume the upward trend no matter who gets to be the next US president!
Otherwise, individual company performance will remain the decisive factor for company stock price movements. Insightful scrutiny and projection of company performances is still the key to individual stock trade ideas!
Don’t agree? Make your bets then to take advantage of opportunities created by political uncertainty!
