A Look at History: The Election Cycle
Many economic and political analysts, including financial experts from XTrade Europe all agree that the outcome of the 2016 United States Presidential elections will have a lot of impact on a global and domestic scale.
Looking at historical data, it actually does not matter in the past whether a Republic or Democrat occupies the White House. It does not significantly impact the US dollar’s stand on the Foreign Currency markets and it does not have a significant impact on the US equity markets. If you are a trader who relies heavily on historical data, this is good news for you. In fact, various XTrade Europe researchers point out that election years actually coincided with favorable markets. Many experts say that based on the events that happened in past presidential years; the effects on the market had nothing to do with who wins but the economic backdrop at that particular point in time.
However, there is also strong data that suggests that markets are significantly stronger when there is continuity. This means that in years when the incumbent is sitting for his second term, the market averages increase. Investors and traders lean more towards continuity if the actual economic and trading policy of the incumbent is favorable to the market.
XTrade Europe’s Market Predictions
Since this is not a continuity year, XTrade Europe financial analysts believe that there is still no guarantee on what will happen after the 2016 presidential elections.
When it comes to the stock market, certain stocks will not be affected with either with a Trump or Clinton victory. As much as there are stocks that will not be affected, there are definitely investments that could be negatively affected. For instance, if Trump wins, he will be opening trade agreements for American workers, and impose tariffs on goods from China and Mexico. If this is the case, many investors will veer away from multinational corporations, especially from countries where huge tariffs will be imposed upon under the Trump administration.
When it comes to the value of the U.S. dollar, technically it is not the new president that will affect its value. However, when the Republican Trump wins, it means a change in party and many changes in trading policy, which may affect exports. Trump is on the record as saying that he wants to change many trading policies. This might mean fluctuations in the US dollar, but the long-term effects could be favorable.
No matter what happens to world financial markets, there are still strong sectors that traders should consider. These sectors will certainly grow stronger no matter what the political state is. According to XTrade Europe, digital products, cloud technologies, and cyber-security will continue to gain. It is wise to invest in companies within these sectors. Another bright spot in the future is the big percentage of the retired and ailing baby boom generation spending trillions of dollars on health care, leisure, and hospitality. These are some things that traders can consider when they decide where to put their money when they are trading online.