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The US Republican Party has long been favored by Wall Street investors, but the current US President, Trump, has lost this edge. From analysis of campaign donations, Wall Street financiers and investors have clearly turned to support Democrat Biden. Because Trump lacks a stable fiscal and financial policy, it is difficult for Wall Street to make capital allocations and investments in the medium and long term.
According to analysis by Deutsche Welle’s economic column, Wall Street has long supported Trump’s reelection; the S&P index, the largest in the US financial industry, has risen 50% since Trump took office. Starck also continues to set new highs.
The analysis pointed out that under the impact of the new corona epidemic, the US economy remains very difficult. Trump has not controlled the virus nor has he launched the second round of the economic stimulus package. Opinion polls show that Trump appears to be losing more and more voters, and US investors have long since stopped supporting Trump. Now most people are beginning to worry that Trump’s defeat will call into question the election results, which can lead to a chaotic transfer of power.
Nigel Green, director of the deVere Group’s financial advisory company, said: “The market is not only betting on Biden, but even expecting the Democratic Party to win the senatorial election.” For the most conservative on Wall Street, this is a very unusual change. “Usually the victory of the Democratic Party means a negative impact on the market, but anyway, now nothing is normal.”
Chris Myers, president of Signum Global Advisors, another financial consulting firm, said that stability and security are what investors need now. One financier said: “People are exhausted. Although the stock market has reached new highs, Wall Street is still angry at Trump’s leadership style. When you don’t know what decision the White House will make next, it’s hard to make capital. medium and long term. Distribution decision “.
The analysis indicates that if the Democratic Party wins both the President and the Senate, both Congress and the White House will be in the hands of the Democratic Party. Economic policy decisions, such as the approval of the multi-million dollar Phase 2 economic stimulus plan, will be accelerated.
Green said that to achieve a sustained economic recovery, investors are now ready to accept the Democratic Party’s tax increases and heightened supervision, because more reliable policies and the reduction of the trade war with China can offset these burdens. Additionally, Biden’s infrastructure plans and increased general public spending should ensure that the economy and the performance of many companies pick up again. In the long run, this can only translate into a higher share price.
The article noted that Deutsche Bank experts also believe that the Democratic Party victory is the most likely electoral outcome. As a result, Wall Street’s investment in cyclical stocks is on the rise, tech stocks and bonds have lost their appeal, and renewable energy, building materials, and industrial stocks are gaining popularity, all of which can benefit from the choice of Biden.
As for political donations, the analysis noted that Wall Street’s support for the Democratic Party is the highest in 10 years. Since the beginning of this year, these finance companies have donated $ 265 million to the Democratic Party, nearly $ 100 million more than the Republican Party. Sarah Bryner, director of CRP, said: “Financial companies are generally considered a reliable source of financing for the Republican Party, but now the trend has been reversed.”
(Zhongshi News Network)
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