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This weekend it finally became clear that it is Democrat Joe Biden who will take over the White House on January 20 of next year. This clarification, believes Chief Analyst Erik Bruce at Nordea Markets, will be good for equity markets.
– Experience is that it is often a good period after an election. The problem is this with Trump’s lack of acceptance of the election result, but as I understand it, there is no backing for the cheating accusations, and then the system will work, he says.
Bruce believes that the Oslo Stock Exchange will be affected by the performance of the Asian markets overnight and the performance of pre-trading in the US, but expects Monday to deliver a rally for the main index in the Oslo Stock Exchange.
– a bit surprising
Before the election, there were several who believed that uncertainty was associated with the outcome and a possible long process would have a negative effect on the markets, but this did not turn out to be true. During the week, the broad Wall Street S&P 500 index rose more than seven percent, while the main index on the Oslo Stock Exchange rose more than four percent.
– The market reaction was a bit surprising and took a little longer to reach results than expected. Market reaction has been more positive than one would think given it took so long, says Bruce, adding:
– Something that you have seen often is that when the elections end, it is positive in itself, and that is what has happened now. Looking ahead, there will likely be other factors that start to become dominant again, such as the coronavirus and uncertainty about the economy. In the US, there is also uncertainty about a new economic crisis package and whether it can be overcome before Trump leaves.
You are not afraid of strong discomfort as a result of a flourishing infection.
While the elections have already been decided, the crown pandemic continues to affect both the United States and other countries, and the economic situation is uncertain. In both Norway and Europe in general, a number of measures have been introduced to prevent further spread of the virus, but Bruce doesn’t think this will necessarily have an effect on stock markets in the coming days.
– I think that in many ways the market has taken into account that the virus will affect economic activity in the fourth quarter. If the measures work and we can see a stabilization of infection rates, it may be positive.
Bruce also says that there is hope that a vaccine against the virus will soon be available, and that this will help improve the situation.
Be careful with tech stocks
– If you had a million to invest, what would you put the money in?
– I would invest a good part of the funds in stocks, I still believe that it is a good place to be if you have a long horizon, answers Bruce.
When asked which sectors would you look further in, it comes up with a mild warning.
– I’m not sure about the international technology stocks. It is a sector that has benefited from the corona pandemic. There are no bad prospects, but they have returned good profit figures while most other industries have struggled, so perhaps some of them have already been included and removed.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
