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The Stockholm Stock Exchange is on the bright side awaiting the outcome of the US presidential election, after opening sharply lower on Wednesday morning. In the US, futures trading, which generally gives an indication of how the stock market should move, witnesses the rise in prices when it opens at three thirty.
The partner position between Donald Trump and Joe Biden makes the outcome of the US presidential election look delayed. This, along with the risks of political deadlocks, creates uncertainty, says SEB chief economist Robert Bergqvist.
But if the stock markets look at the right things, prices should, according to him, continue to rise in the long term.
– If the market is going to act correctly, it will really look up and see what happens in the future in 2021, 2022 and 2023. And of course there is an economic recovery and we have a continued expansionary economic policy. If that’s what the stock market is focused on, it will go up, says Robert Bergqvist.
Robert Bergqvist, SEB Chief Economist.
Photo: Elisabeth Ohlson Wallin
Opinion polls earlier this week indicated that Joe Biden seemed poised to emerge victorious in the presidential election. This had a positive effect on the major stock exchanges. In the United States, all major indices closed clearly positive on Tuesday night. At the same time, overnight it has gotten significantly smoother than what the measurement institutes have seen in their polls, and the gambling companies have rocked back and forth in terms of the favorite between Trump and Biden.
Despite the great uncertainty Stock market players seem to be taking it all in stride so far.
– My interpretation is that regardless of who moves or stays in the White House, it is the case that economic policy in the United States will be more expansive. The crisis in the American economy is so deep that regardless of whether you are a Democrat or a Republican, you should endorse more support for economic policy and that is what the stock markets are all about, says Robert Bergqvist.
Frida Bratt, a savings economist at Nordnet, believes that what determines the course of the stock market for the rest of the week is how long the elections will be. A clear electoral victory, whoever it is, will give positive reactions.
– It is more important, precisely because of the stimulus package that he expects, he says and explains:
– Let’s say Joe Biden would win but Republicans are taking home the Senate and blocking the stimulus package. That would create a lot of uncertainty.
Frida Bratt, savings economist at Nordnet.
Photo: Magnus Hallgren
Although both candidates seems to drive up the stock markets, believes that Donald Trump is preferable as a winner, precisely from the point of view of the stock market.
– Then there will be no more taxes and it has also been less willing to strict restrictions and closures during the pandemic. He’s very concerned about the economy and also about the stock market, says Bratt.
At the same time, as always, there are other clouds of discomfort to consider. Stock market players often focus on one thing at a time, but the corona pandemic is still far from over and is likely to be reflected in the stock market when the election uproar has subsided and the results be clear.
– We must not forget the spread of the virus, which will have an impact on growth during the fourth quarter and probably also in the first quarter of 2021. When the television cameras and electoral surveillance are withdrawn, reality will return and then we will have a situation difficult. Unfortunately, I think this can make a negative impression, says Robert Bergqvist.
The article is up to date.
