US Election: What Markets Vote – What Scares Investors – The 4 Scenarios



Although many remember failing to predict Donald Trump’s shock victory in 2016, 54% of investors in a global survey by Swiss bank UBS “see” Joe Biden winning next Tuesday’s US election, compared to 46% The polls also predict a clear victory for the Democrats, while the average of betting companies gives Biden a 64.2% chance of winning. The result could lead to changes in various sectors of the economy and determine the course of stocks and bonds worldwide, while in any case investors wonder whether risk-on will be encouraged or a regime of turmoil will prevail. (risk-off) in the markets. The Global Wealth Management division of UBS Switzerland AG has prepared the following four scenarios for the US elections: The four scenarios Scenario 1 (55% probability): In the “blue wave” or clean sweep (blue wave or clean sweep) scenario, the Biden wins, with Democrats taking control of the Senate and retaining House. A new fiscal package and large-scale investments ($ 2 trillion) in infrastructure and clean energy are being introduced. Maximum tax rate rises to 39.6%, as does corporate tax at 28%. Scenario 2 (28% chance): In the status quo scenario, Trump is re-elected, with a split Congress (Republicans retain Senate and Democrats control of Parliament). Limited legislation, moderate fiscal package, escalation of tensions with China. Scenario 3 (15% chance): In the “split Congress” scenario, Biden wins the election, but with a split Congress, the Democrats lose control. Senate. Difficulty in implementing his policy, while taxes remain unchanged. Scenario 4 (2% probability): In the “red wave” scenario of a Trump victory, with Republicans taking control of the Senate and retaining Parliament, tax cuts will become permanent, while the budget of the Ministry of Defense will increase. What Investors Fear The case of a delayed presidential election due to a letter ballot or a questionable result, with consequent uncertainty, poses a risk to markets. Some changing states, also known as “swing states”, do not have a stable party affiliation. They also delayed Trump’s victory over Hillary Clinton in 2016, they may be late in announcing results due to the measure of the letter ballot, with the possibility that the ballots there will end up for counting in the Supreme Court can not be ruled out, but increasing the uncertainty In any case, a controversial result, with Mr. Trump refusing to accept defeat and remain in power, is considered the most dangerous for the markets. Tassos Mantikidis PRINTED EDITION STEP Follow it on Google News and learn more all the newsSee all the latest News from Greece and t ον Κόσμο, στο



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *