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Scenarios for the impact of the US elections on financial markets


The vote is currently taking place for the 2020 U.S. presidential election And all eyes are on the United States, in part, in view of the impact the election outcome will have on financial markets.

Trump or Biden, who will win?

Polls place the Democratic candidate Joe biden, former vice president in the time of Barack Obama, at the helm. But there is nothing more uncertain than the polls.

The truth is the statistics. And they say that in most elections an outgoing president has almost always won, with a few exceptions: in 1980 Jimmy Carter was defeated by Ronald Reagan, while George HW Bush (senior) had to cede his second term to Bill Clinton in 1992. But since then, each president has been in office for 8 years.

However, as JPMorgan points out, if there is a time when incumbent presidents have not been re-elected, it is in the case of economic recessions. This is precisely the scenario in which today's elections are taking place.

The coronavirus pandemic has plunged the world into the worst economic crisis since the war. In short, the Coronavirus will be the great component of this competition.

US elections, Biden vs Trump: what will happen to the financial markets?

US Bank's opinion

US Bank issued a report analyzing different scenarios after November 3, for example, noting that generally when there is a change of party in the White House, the markets gain 5%. When the president is reelected, they earn 6.5%.

It is also important to consider the majority that will go to the House and Senate. Indeed, if there were a fully Republican or fully Democratic President and House and Senate, this would result in a short-term volatility for markets.


The opinion of Capital.com, a Biden victory would be good for the S & P500, as the Democrat would already have a set of measures ready to shake up the US economy. If Trump wins, Capital.com is still predicting volatility.

For gold, it would be a success either way. Whether Biden wins or Trump is reconfirmed, it will continue to be bought as a safe haven par excellence and its price forecast is positive.

The worst scenario for the markets

The worst case would be that of a disputed result. It does not seem like a remote possibility, since the outgoing president, Donald Trump, already anticipated that it could not recognize the validity of the vote if your challenger wins.

All analysts agree that in the event of an uncertain outcome, this would lead to a period of market turbulence.

In any case, in the next few days everything will be clearer. Today is the big day, and probably Wednesday could be the final verdict on who will lead the United States of America for the next 4 years.

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