Trump vs. Harris: how to prepare your wallet for the electoral challenge
Financial markets/economy
Posted by MoneyController on 25.09.2024
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The US election is an event that is not only getting closer and closer, but is also held in high regard by financial analysts and professional investors.
The US presidential elections are getting closer and closer: the candidate for the Republican Party, Donald Trump, and the candidate of the Democratic Party, Kamala Harris, will challenge each other. The outcome of these elections could also have an impact on the financial markets. That is why some analysts and managers are assessing the different scenarios that will arise after the October elections. Some of the considerations of these experts were reported in ‘Corriere della Sera’ in an article by Pieremilio Gadda.
As Marco Piersimoni, senior investment manager at Pictet am, explains, a possible re-election of Trump could mean a tax cut and a general deregulation of some markets, with particular benefit, he explains, for the banking, energy and pharmaceutical sectors. Other measures, such as the tightening of immigration policies, as well as increased duties, would instead mean an inflationary boost. From the point of view of government bonds, Treasuries could see their rates rise, since Trump's election promises include a marked recourse to government spending.
Moreover, in light of recent statements in favour of bitcoins, explains Marco Vailati, head of research and investment at Cassa Lombarda, it is possible that the price of the cryptocurrency (and possibly other altcoins as well) will go up.
A Kamala Harris victory, Piersimoni explains, might at first be greeted a little less warmly by the markets, as the Democrats envisage higher taxes for the wealthy, including large corporations. Less so, however - as one can read further in Gadda's article - should US government bonds be affected, since the projected deficit is lower. However, expenditure is planned to improve health-related services. Moreover, Vailati explains, the Democrats' greater favour for environmental and green issues should not be underestimated.
So far, the scenarios envisaged concern a complete victory of either side. In the case of a victory without a majority (the most likely scenario, according to Vailati) in Congress, things would be a little different: Trump, for example, explains Piersimoni, would be unlikely to get a tax cut approved; for his part, in the case of a victory without a majority in Congress, Harris would not be able to mark a real discontinuity from the current Biden administration.
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