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Original Title: Trump: The Stock Market Crashed When Biden Was Elected! How US Elections Affect A Stocks – Concept Stock Approaching
The countdown to the US elections is less than 10 days from Election Day.
According to the “New York Times” report, the 56th US presidential election will be held on November 3. Trump can be described as a full-blown “drama”. Previously, Trump’s infection with the “new crown pneumonia” has become the focus of the world, and discussions about whether he can be re-elected have risen to a fever pitch; furthermore, the supporters of the strongest enemy, Biden, are not a minority. This presidential election had the melon-eating crowds watching with excitement.
At 9 a.m. on October 23 Beijing time, the final debate of the 2020 US presidential election focused on the new corona virus, the American family, the American race, climate change, national security and the leadership. Trump said the peak of the new corona virus has passed. .
In fact, Worldometers real-time global statistics show that the cumulative number of confirmed cases of new coronary pneumonia in the United States has exceeded 8.66 million, and the cumulative number of deaths has exceeded 228,000. This data almost exceeds the number of deaths in the United States in 2009. The misjudgment of the new epidemic of the crown can become a major obstacle to Trump’s re-election.
In yesterday’s debate, the two sides also discussed the issue of the stock market. Trump said, “They said if I was elected, the stock market would prosper, and if he (Biden) was elected, the stock market would collapse.” In response, Biden said, “The idea of a stock market boom is just what he (Trump) thinks. People in the group don’t live in the stock market.”
So if Trump and Biden are elected as the next president of the United States, what impact will they have on global stock markets, and how will they affect A shares?
Biden’s current approval rating is ahead of Trump
There are only less than 10 days left before the elections. Who can win this race? Let’s take a look at the voice of the market. According to statistics from the US RCP poll, the Republican Party approval rate for Trump is less than 45%, while the Democratic Party Biden approval rate is ahead of Trump, close to 50%, But the current approval rate doesn’t mean the end result won’t happen. Variety.
Unlike other countries, the United States implements a system of electoral groups, votes are counted from state to state and the party with the highest support index can obtain all electoral votes in this state. Trump and Biden belong to the Republican Party and the Democratic Party, respectively. Professional analysis shows that in previous presidential elections, “swing states” (with no fixed party attributes, evenly matched between the two sides of the campaign) played an important role in the US presidential elections. In 2016, Trump defeated Democratic opponent Hillary Clinton and was elected president of the United States precisely because he won votes in the “swing states” (Florida, Pennsylvania, North Carolina and Ohio).
From an endorsement field perspective, Trump supporters are less well known, including Trump’s second son Kanye, Trump’s daughter Ivanka, etc .; But Biden’s supporters include not only well-known artists such as Dashi Johnson, Taylor Swift, NBA star James, as well as former US President Barack Obama, former wife of President Michelle Obama, former Secretary of State Hillary Clinton and former Republican Secretary of State Colin Powell.
Trump’s approval rating lags behind Biden
European poll results show: I hope Biden is elected
Based on the results of European polls, most people hope that Biden can be elected. Biden’s support rate is as high as 80% in Denmark and more than 70% in Germany. They believe that if Biden is elected, he could further strengthen America’s allied system, place importance on multilateral frameworks and global governance cooperation, correct some unacceptable practices of the Trump administration in Europe, and provide some opportunities to repair relations. between the United States and Europe.
On the contrary, if Trump is re-elected, he can constantly implement his radical measures, which is very detrimental to the enthusiasm of global investors. Furthermore, Trump’s policy of priorities in the United States has caused great harm to European countries.
US Presidential Election Year Dow Increased Less and Less
In fact, the US presidential election can be said to be a major event that has attracted global attention and affected the hearts of hundreds of millions of people. Regardless of who is elected, it can have certain positive and negative effects on China’s economy and capital market.
First compare the performance of the Chinese and US indices. In the years before the US presidential election (1992 to 2016, data every 4 years), the Dow Jones industrial average in the United States increased more or less. As of 2020, the Dow has risen slightly. Status: Looking at the A-share market again, as of Oct. 23, the Shanghai Index was up 7.47% for the year, outperforming the Dow in the same period. Under the global capital market peg mechanism, any future performance of the US stock index may affect A shares.
According to backtesting data, in the years in which presidents (Bush, Carter, Ford) failed to be reelected in history, both the Dow index and the Nasdaq rose in the three months after the elections. In addition, the new president will take active measures to improve the current situation of the country in the initial stage of his mandate. The proposed monetary and fiscal policies are basically closely related to the economic conditions faced in the initial stage of his mandate. Currently, the new corona epidemic is one of the biggest risks to the United States today, so it doesn’t matter whether Trump can be re-elected, as long as the new corona epidemic can be well controlled, the Dow you can still have a certain increase during the year.
It is worth mentioning that if Trump cannot be re-elected, according to his style, the impact on the global economy and capital markets can be unpredictable before the transfer of power (January 20, 2021). In public opinion, it may be more negative, so this may also be a major reason why Biden’s approval rating outperforms Trump.
Biden’s Choice May Benefit A-Stocks, US Foreign Trade Stocks, and Tech Stocks
Whether Trump or Biden are elected, if China has a silver lining, the answer is yes. Biden stated that if elected, he will resume the high-level dialogue mechanism with China and negotiate to reach the conditions for the elimination of tariffs. According to public information, the election of Biden may benefit US foreign trade actions, as well as some technological fields (semiconductor, independent and controllable).
According to the statistics of the Securities Times and Databao, the A-share market has a total of 133 trading stocks with the US (a high proportion of US revenue), the semiconductor industry and independent holdings. Among them, there is a relatively high share of US trading stocks.Xichuang Medical Benefits、Zhejiang Yongqiang, Hongte Precision, etc., Xichuang Yihui is the world’s leading provider of smart medical and general business smart solutions. In 2016, US exports accounted for more than 40%; Zhejiang Yongqiang’s latest overseas revenue accounted for more than 90%, and the United States revenue accounted for more than 40%.
However, regardless of the outcome of the US General Election, stocks with sustained high growth performance will continue to be the focus of market attention. Statistics show that among the 133 stocks listed above, institutions have unanimously predicted that net earnings growth will exceed 35% from 2020 to 2022, and a total of 17 stocks have underperformed the market since October, including Xichuang Yihui,Topway Information、North HuachuangWait.
All 17 stocks have fallen since October, with the biggest dropsShengbang Actions、China SoftwareThe former fell more than 20%. In terms of performance, the lower limit of Shengbang’s net profit growth in the first three quarters reached 55%; Based on the institutions’ unanimously expected performance, this year’s performance is expected to double.Changdian technology、Changchuan technology, China Software, etc., the net profit growth in the next two years will exceed 50%. Stocks include China Software,DongfangtongWait.
Trump reelection or good medicine + artificial intelligence actions
If Trump is re-elected, what sectors will benefit from A shares? The political agenda for Trump’s second term includes topics such as employment, the eradication of the new crown and health insurance. In medicine, Trump plans to create 10 million new jobs and 1 million new small businesses in 10 months.
The growth of this job opportunity is based mainly on encouraging the return of US companies and new commercial protection policies, while the pharmaceutical androbotTrump highlighted the return of the top two manufacturing industries. From the perspective of the pharmaceutical industry, the United States today relies heavily on China for raw materials such as vitamins and antibiotics; and the suppressed robot sector on the other hand will also force the national artificial intelligence industry to develop vigorously.
Based on this, Databao has classified 67 stocks related to vitamins, antibiotics, and AI-related concepts into A stocks. Since October, there are 13 stocks that have underperformed the market and institutions have unanimously predicted their net profit. will increase by more than 25% from 2020 to 2022, includingPropharm、Ziguang Guowei、Zhongke ShuguangWait, the stock price went up slightlyIFlytek、Brother TechnologyWait.
In terms of performance, the lower bound of Brother Technology’s net income growth in the first three quarters exceeded 350% and Prolog Pharmaceuticals’ net income in the first three quarters increased by 45.99% year-on-year. In terms of institutional forecast performance, Brother Technology,Beijing Junzheng、Jincheng PharmaceuticalFour stocks will double their performance in 2020, among which Jincheng Pharmaceutical is the largest domestic manufacturer of cephalosporin antibiotic side-chain intermediates. Beijing Junzheng, Sichuang Yihui,Jing JiaweiNet profit in 2021 is expected to increase by more than 40%,Anglikang, Ziguang Guowei and 4 other stocks in 2022 are expected to increase net profit by more than 30%.
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Editor in Charge: Yang Yalong
