The markets today, Thursday, viewed several hours before the opening bells in North America, appear poised to open in positive territory, with most major indicators firmly in the green at time of writing
Under normal circumstances these indicators can change during the runup to the opening bell and at any time afterwards.
The optimism is being driven by the outlook for a COVID 19 vaccine, President Donald Trump’s apparent recovery and stimulus hopes.
“Stock markets have maintained their bullish momentum, as the focus once again turns to hopes of a US stimulus package,” said Chris Beauchamp, Chief Market Analyst at IG Group in London. “A softening of Trump’s tone on stimulus has allowed stock markets to keep moving higher, after a rebound in US indices that saw Tuesday’s losses wiped out.”.
However, neither the markets nor the eventual federal election outlook are substantially affected by last night’s Vice-Presidential debate according to analysts interviewed by Reuters.
The debate did not change the fundamental outlook, suggests Gary Ng, an economist with Natixis, a French financial management firm. “I think this debate didn’t change things very fundamentally – of course it was a more polite debate than the previous one – but it didn’t change the market’s expectations in terms of the result, so there haven’t been large movements.”
Investors and voters are more focused on the second Presidential debate, explains Kenny Ng, Everbright Sun Hung Kai Strategist in Hong Kong.
“In my opinion, investors are paying attention to the second debate of the U.S. Presidential election,” he said, according to the Reuters report.” Ng added that the market will make further observations but has begun to deal with expectations of a Biden win.
In Tokyo, analyst Akira Takei, Global Fixed Income Fund Manager at Asset Management One, suggested a frightening hypothesis, which, if correct, will overhang the economy for months to come.
“The race is neck and neck. Trump will dispute the results and we won’t know right away. It could take one or two months.” Takei suggested that in that event, policy would be put on hold and the U. S. economy ‘… could fall off a fiscal cliff due to a lack of support’.
Notwithstanding these views of last night’s Vice Presidential debate, one projection seems reasonably safe: we will see constant and increasing market volatility as the election date approaches and what happens afterwards very much remains to be seen. That reality should be factored into any investment decision making in the meantime and tomorrow I will suggest another strategy for doing that.