What the two most likely scenarios mean for your portfolio
Peter Garnry
Chief Investment Strategist
Résumé: Biden is out, Harris is in. What would a potential win for Harris mean to the financial markets? Hear what our experts have to say on that topic in this video.
The 2024 U.S. presidential election is rapidly approaching, and recent events have dramatically shifted the political landscape. With Presiden Joe Biden withdrawing from the race, and the entrance of Vice President Kamala Harris and her running mate Tim Walz, new dynamics are coming into play. These developments are leading investors to reassess their strategies, particularly in light of potential election impacts on investing and financial markets.
In the video above, Saxo’s strategy team shares insights on how the current movements in the US election are impacting the financial markets.
Election scenarios impacting investing strategies
As we approach the election, two main scenarios are emerging, each with distinct implications for investing strategy:Trump's narrow victory:
If Trump narrowly wins, he is likely to secure control of Congress, giving him substantial influence over policy. This scenario could result in significant changes, particularly in areas like deregulation, which could benefit sectors such as small-cap stocks and real estate.Harris wins with gridlock:
If Harris wins but faces a Republican-controlled Senate, legislative gridlock is likely. This could make it challenging to extend fiscal stimulus programs, increasing the risk of a recession. However, sectors like renewable energy and technology might benefit under her leadership, offering different opportunities for investors.Strategic considerations for investors
The potential election impact on investing extends beyond U.S. borders. For example, a Trump victory could strengthen European defence stocks, given his stance on NATO and the Ukraine conflict. This shift could create new opportunities in international markets.
The outcome of the 2024 U.S. election will likely have a impact on financial markets, influencing sectors ranging from small-cap stocks to renewable energy. Therefore, as Election Day approaches, investors should stay informed about election developments related to financial markets and adjust their investment strategy accordingly.
Follow Saxo’s coverage of the US Election to stay informed on how the election can impact your investment strategy.