The presidential election in the world’s largest economy has also been a major recent event in the global financial market, where stock market indices rose yesterday afternoon, in Asia, Europe and the United States in the morning.
Although Donald Trump has been generally favorable to the US economy and has also had a positive impact on the Wall Street Stock Exchange index, he stands out with some unpredictability. The new president, meanwhile, is expected to be more open to the rest of the world, which means less trade tensions with Europe, Canada and Mexico. It could also mean a smoother flow of goods, services and money, which is not insignificant right now as the prevalence of Covid-19 reaches new records. The question may arise – why did the US stock market indices rise both during Trump and when it became clear that Biden almost certainly won the election?
Trumps give the market a boost with stimulating tax policies, while Biden could do so with economic openness. This means that at least large transnational companies could make more money than before, but companies whose lives will be complicated by a more open import policy could lose out. What could unite during the two presidents could be the very aggressive monetary policy of the US Federal Reserve, which focuses on cheap and easily available loans to promote consumption. It is likely that the losers under the new US administration will be arms manufacturers and traders, as arms movements could tighten. Also interesting is the question of the further development of the US oil industry, which experienced its initial great boom under Barack Obama. Biden’s rhetoric on Iran is likely to be far more conciliatory than his current counterpart. This, in turn, does not rule out the possibility that, in the course of various compromises, Iranian oil could also return to the world market, which could contribute to a general fall in the price of black gold on the stock exchange. It is true that yesterday the price of oil rose quite rapidly, but this can be explained by the general rise in prices for the most risky groups of financial instruments, as well as by the hopes for smoother international trade in the future, and thus higher fuel consumption.
–
