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The subject of today’s report is “If you look at these three indicators, you will win the US presidential election.”
Wanbao Investment Gu Cai Mingzhang emphasized that the most stressful week in the financial market has come. Who will win the White House? The following three indicators can be observed.
First, the US Presidential Stock Index Since 1944, look at the S&P 500 from July 31 to October 31, which is three months before the general election. If the index goes up, the current president wins, and if it goes down, the challenger wins. In the first three months of this election, it was down 0.6%, suggesting that Biden won. In fact, the S&P 500 rose sharply in August, but declined since September because of the second epidemic indicator to watch.
The peak of the first wave of the new corona in the United States was 75,000 new confirmed cases on July 16, and it began to slow down. By September 7, there were only 25,000 cases. Therefore, the US stock market rallied strongly during this period, but did not expect the former. The second wave of epidemics worsened, reaching a record 99,000 cases on October 31.
The Trump administration blamed China for the first wave of the epidemic, but the second wave of the epidemic reached a new record and can only be blamed for its ineffective prevention. New York State is canceling the 14-day quarantine policy for high-risk travelers in New York and implementing stricter rules that travelers can pass with a second negative test within 7 days. This is the first case in the United States, but will other states follow up after the election?
The third indicator of relief is that the US Congress approved the $ 2.2 trillion aid plan in late March. People with annual incomes of less than $ 75,000 received a $ 1,200 aid check and $ 500 for their children. It is understood. However, when will the second ransom check be received? Congress won’t approve the bailout deal before voting on November 3, and America’s third-quarter GDP has grown 33.1%, thanks to the first bailout check, reflecting the economy. Following the restart of business activities, GDP increased by USD 1.64 trillion in the third quarter, but the gap of USD 2.04 trillion that fell in the second quarter has not been fully filled, which indicates that the crisis has not been fully resolved.
The US Economic Engine looks at consumer spending. The strong 40.7% rally in the summer was primarily due to government generosity, unemployment benefits, emergency business loans, and $ 1,200 US domestic checks. However, this optimism did not last. The third quarter In the end, the US economic growth rate slowed. In September, the monthly growth rate of industrial production fell 0.6% in reverse, ending the four consecutive months of rebound. The economic recovery in the fourth quarter is difficult to sustain. If Biden wins, he will only take office at the end of January next year. The fourth quarter is a window period, only the Federal Reserve will loosen monetary policy, but the lack of an effective fiscal policy from the Trump administration will remain in vain, causing the United States to enter a second recession.
In fact, watching the 21% and 17% drop in rents in America’s best areas in San Francisco and New York is a huge warning sign from the US economy. Let’s look at the US dollar index again. The first wave of the epidemic began to subside after 102 o’clock in March, indicating that no matter who is elected, there is no other way to save the market. printing money. Gold fell from $ 2,072 an ounce to $ 1,883 in the three months leading up to the election. The role of the cover has faded. Instead, it rose to $ 14,000 in the three months leading up to the election, a new record since last year.
Wanbao Investment Gu Cai Mingzhang emphasized that Trump and Biden’s most important trade policy is different. Trump advocates protectionism and makes the US dollar stand out. After launching the China-US trade war in March 2018, the US dollar index rose sharply from the bottom of 88 points. Popular denies Facebook’s Bitcoin and Libra and cannot challenge the status of the US dollar. In December 2017, Bitcoin reached a soaring price of $ 20,000, which fell to $ 3,300 in January 2019.
Biden advocates for regional economic cooperation. The US dollar will not dominate. Emerging market currencies will work. There are no criticisms of Bitcoin. However, from a sensitivity and rationality perspective, Taiwan stocks are the most popular among Asian stocks, March 2018 Since Trump launched the Sino-US trade war, Taiwan stocks have risen from 10,638 points to a maximum of 13,031 points, an increase of 2,393 points and an increase of 22%. Exports are brilliant. The General Accounting Office revised the third quarter GDP to 3.33%, compared to August. The forecast increased by 1.32%, the top of the four dragons in Asia, and the forecast for the whole year went from 1.56% of the August forecast to 1.9%.
Wanbao Investment Gu Tsai Mingzhang emphasized that the Taipei stock market fell during the intraday session on Monday, which differs from other Asian stock markets in that it is very emotional.
It should be noted that the most important variable is whether the benefit of the transfer order changes. CMU (2303-TW) EPS was 0.75 yuan in the third quarter, the highest in a single quarter in 2016, but fell for 2 consecutive days. MediaTek (2454-TW) EPS 8.42 yuan in the third quarter, revenue reached a record high, closing 3% on Monday.
The United States is rumored to have loosened Huawei’s non-5G business and transferred the order to SMIC, which will not reduce the price increase for UMC’s 8-inch foundry. Biden’s election may further loosen restrictions on Huawei’s mobile phone business. Qualcomm can supply advanced process chips, MediaTek’s EPS will weaken in 2021. If Biden wins the election, he will not easily reduce tariffs on Chinese products, but he may loosen the ban on Chinese companies. This makes US semiconductor tech stocks the biggest beneficiaries, but US tech stocks 2330-TW), so TSMC is bullish. Biden will still crack down on intellectual property rights when elected, which is why the individual stocks China and Taiwan IP cooperate with are Creative (3443-TW), Worldchip-KY (3661-TW), Liwang (3529- TW), Andes Technology (6533-TW)) Beautification to break US sanctions is still a benefit.
Trump was elected in 2016. US stocks rose 7% a month after the election. If Trump is re-elected, it will not be easy to replicate the great occasion of the first term. 91 million people voted in advance, reaching 65% of the total votes of the previous session. Among them, 28% did not vote last time in 2016, so this time there are only two types of voters, like Trump and they do not like Trump.
The short-term selection of management stocks is based on the leadership of the US equity market.In the medium and long term, fundamentals return. Trump won to celebrate the short-term market. The return of the epidemic will hit the second recession of the US economy If Biden is elected, Taiwan stocks may fall first for a while, but there is a rebound. Space, the third quarter financial report of individual stocks is better than expected, and the fourth quarter outlook is good, including long distance trading opportunities and Bitcoin concept stocks are the dark horses after the elections.
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