The US election is tomorrow: what should traders expect?

How will a Trump or Harris victory affect the financial markets

As the U.S. presidential election approaches, which will be held tomorrow, November 5, 2024, traders and investors are eagerly awaiting the results of the vote, as they may significantly affect the financial markets. How exactly — we tell you in today’s Strifor review. This year’s contest is between former President Donald Trump of the Republican Party and incumbent Vice President Kamala Harris of the Democratic Party. Polls show that each candidate’s chances of winning are roughly equal, and that creates uncertainty for investors.

Political risks and trade disputes

Presidential elections are always associated with geopolitical risks and trade disputes. Trump has promised to raise tariffs on US imports if he wins, which could trigger retaliatory measures from other countries, primarily China. He said overall duties on imports could reach 10-20%, while tariffs on Chinese goods would reach 60%. This could lead to maintaining domestic production and import substitution, however, while increasing the risk of inflation, which could negatively affect demand for durable goods.

On the other hand, Harris’ program to increase taxes on the wealthy and corporations could raise concerns among investors. Increasing the corporate income tax from 21% to 28% and raising the capital gains tax for incomes above $1 million could reduce interest in risky assets. This will put pressure on the stock market, as many investors prefer more predictable investments.

Impact on financial markets

Financial markets react to election news, and no matter how the circumstances play out, traders should be prepared for volatility. Both Trump and Harris have their ideas on how to stimulate the economy, but their methods differ. Trump’s potential imposition of duties could support domestic production, but could also lead to retaliatory actions that worsen relations with trading partners. At the same time, Harris’s tax policies could slow corporate growth and depress stock prices.

Cryptocurrency market

As the election draws closer, the cryptocurrency market is also experiencing volatility. Bitcoin is experiencing a pre-election rally, and many investors are counting on a possible price rise if Trump wins. His promise to develop the crypto industry and make America the “crypto capital of the world” creates optimism among crypto-enthusiasts. On the contrary, if he wins, Harris may continue the policies of his predecessor, which could reduce interest in cryptocurrencies. Although Kamala claimed loyalty to the crypto industry during her campaign, many are skeptical of these statements.

Trump’s key promises

1. Immigration and border security

Trump has promised to close the border and stop what he calls the “migrant invasion,” intending to carry out the largest deportation in U.S. history. He plans to focus on undocumented migrants, especially gang members and drug traffickers, using federal and local resources to increase enforcement.

He has also proposed a universal tariff of 20% on imports to protect American jobs and industry, which he announced at a rally in North Carolina.

2. Economic policy

A key part of Trump’s platform includes plans to reduce inflation and improve living conditions in the US. To do so, he intends to cut taxes, including eliminating the federal tax on tips and on Social Security benefits, which he calls “cruel double taxation” of retirees.

Trump also plans to repeal tax hikes enacted by the Biden administration and restore previous tax breaks, including removing limits on state and local tax deductions up to $10,000.

3. Energy Independence

Trump promises to make the U.S. a leading energy producer by increasing oil and natural gas production. He says he will speed up drilling permits and lift restrictions on energy exports.

4. Social Issues

Trump’s campaign has stated a stance against critical race theory in schools; he has proposed stripping federal funding from educational institutions that promote it. He also promised to keep transgender women out of women’s sports.

5. National Security

Trump emphasizes the need to strengthen the military to ensure it remains the strongest in the world. He has also promised to prevent World War III by restoring peace in Europe and the Middle East through strong defense measures.

6. Health Care

Trump has promised to replace the Affordable Care Act (Obamacare) with a new plan, though he has yet to provide specific details. He claims his administration will work on concepts to replace the program.

7. Infrastructure and urban development

Trump proposes rebuilding American cities, making them safe and attractive, and creating “Freedom Cities” aimed at revitalizing economic opportunities for young families.

8. Election Integrity

Trump intends to ensure election transparency through measures such as Election Day voting, voter ID laws, and proof of citizenship requirements.

Campaign strategy

Trump’s approach combines traditional Republican themes with populist rhetoric aimed at energizing his base. In his speeches, he often includes personal attacks on opponents and promises to quickly implement an agenda if elected. In addition, Trump utilizes social platforms such as Truth Social to directly connect with voters who support him.

Overall, Trump’s campaign promises reflect a combination of policies implemented during his previous presidency and new initiatives to address pressing voter issues, particularly in the areas of immigration, the economy, and national security.

Haris’s key promises

Economic Policy

• Middle Class Tax Cuts: Harris promises to cut taxes for more than 100 million working and middle-class Americans by restoring and expanding tax credits, including a new child tax credit of up to $6,000 for families with newborns.
• Affordable Housing: It plans to build 3 million new homes in its first term and offer up to $25,000 in down payments for first-time homebuyers who pay rent on time for two years. The initiative aims to address the housing shortage and improve housing affordability.
• Regulate rental costs: Harris proposes banning the use of algorithm-based pricing tools by landlords and eliminating tax credits for investors buying multiple homes to avoid rising rental prices.

Social Issues

• Abortion Rights: A strong supporter of reproductive rights, Harris pledges to enshrine abortion rights in federal law and prevent a national ban on abortion.
• Gun Control: She supports reinstating the assault weapons ban, universal background checks, and “red flag” laws that would temporarily ban gun ownership for those who pose a danger.

Immigration

• Bipartisan Border Security Bill: Harris intends to advance an updated bipartisan bill to strengthen border security resources as well as address humanitarian issues at the border. This includes support for measures to combat human trafficking.

Health Care

• Affordable Health Care: Harris plans to expand the Affordable Care Act (Obamacare) to make health care more affordable. She seeks to set the maximum price of insulin at $35 for all Americans and place limits on out-of-pocket spending on prescription drugs.

Economic growth and job creation

• Investing in Workforce Skills: Her campaign includes plans to increase the number of registered apprenticeship programs and promote skills-based hiring practices. Harris emphasizes the importance of creating decent-paying jobs through collaboration with unions and businesses.

Harris’ campaign reflects a combination of progressive ideas with moderate approaches that she has previously voiced in the 2020 election. She seeks to portray herself as a candidate focused on the future and expanding on the accomplishments of the Biden administration.

Let’s recall the events from four years ago, specifically the pre-election atmosphere of November 3, 2020, when Joe Biden was elected as President of the United States. Let’s analyze the price dynamics of key assets, such as Bitcoin, gold, silver, and oil.

Bitcoin: On Election Day, Bitcoin’s price was approximately $14,350. By the time the election concluded on November 5, the price had reached a peak of $14,381, marking its highest level since January 2018.

Gold: During this period, the price of gold hovered around $1,900 per ounce, reflecting the uncertainty in financial markets—a sentiment that remains relevant today.

Silver: At that time, silver was trading at roughly $24 per ounce, in line with the broader trend of rising precious metal prices amid market instability.

Oil: On Election Day, the price of Brent crude oil was around $40 per barrel, which was below the levels seen earlier in the year due to the economic downturn triggered by the COVID-19 pandemic.

To summarize

In conclusion, the 2024 election could be an important turning point for both the U.S. economy and global financial markets. Future presidential decisions could have a lasting impact on traders and investors, and given the current uncertainty, they should be prepared for unexpected changes and high volatility.

High volatility is an opportunity for both large gains and large losses, so it is important to remember that financial risks can be unpredictable and traders should do their own research and risk assessment. The stock and cryptocurrency market can react positively or negatively to the election, depending on the policies chosen. Therefore, it is important to keep an eye on developments and assess how they may affect investment strategies. And if you decide to trade during such a major infomercial, register an account with Strifor and trade on favorable terms with a reliable broker. We always pay!

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