As the 2024 U.S. presidential election approaches, Wall Street strategists are predicting that the election could lay the foundation for a year-end rally in global financial markets. Looking back at past market performance, financial markets are usually weak in the week before voting, which often foreshadows a strong rebound in the following month. The market decline in the past week may be a harbinger of such a positive signal.
Although it is uncertain when the results will be released after the voting ends, the impact of this election on financial markets has already been seen. Polls show that Vice President Kamala Harris and former President Donald Trump are evenly matched, which has kept market sentiment cautious. In the traditional financial market, the S&P 500 index is still below its previous historical high. Although it has fallen slightly since October, the decline is less than 3%, which is much lower than the 4%-5% decline before previous presidential elections. It is particularly worth mentioning that the funds flowing into the US stock market in 2024 have reached 500 billion US dollars, showing the strong confidence of investors.
The prediction of year-end gains also has historical basis. The U.S. stock market usually performs strongly at the end of the year, especially after the results of the presidential election are clear, and the market often sees steady growth in December. Analysts expect that as the election results are announced, investor confidence will increase, volatility will decrease, and market attention will shift back to the Fed's policies. The Fed's interest rate cuts, economic resilience, and innovations such as artificial intelligence are expected to drive the stock market to climb further in the future.
It is worth noting that the outlook for the financial sector depends not only on the outcome of the presidential election, but also on the composition of Congress. Chen believes that if Washington falls into a political deadlock, the financial sector will continue to perform well regardless of who ends up in the White House.
Interestingly, the stock market's performance before the election day also seems to be closely related to the post-election market. Data shows that if the stock market performs strongly during the election week, there will often be a correction in the month after the election; while if the stock market performs weakly before the election, it is more likely to rebound before the end of the year, with an average increase of 4%. The S&P 500 fell 1.4% last week, which may provide support for the year-end rally.
In the cryptocurrency market, the impact of the election is particularly evident. Bitcoin has recently surged 7.6%, breaking through the $73,000 mark, and the market generally bets on Trump's victory. Trump has promised that if re-elected, he will promote the United States to become the world's cryptocurrency capital, plan to establish a strategic Bitcoin reserve, and appoint regulators to support crypto assets. CME's Bitcoin options data shows that the current 30-day implied volatility of Bitcoin has climbed to its highest point since August, and the market expects that after the vote, Bitcoin's volatility will reach 4 times the normal level.
The cryptocurrency market has its own cycles, and in the past few years, it has usually seen strong gains at the end of the year. Historical data shows that Bitcoin's average gains in October, November and December were 26%, 36% and 11%, respectively. This cycle may continue in 2024, and the market is optimistic that the price of Bitcoin may break through the $100,000 mark.
The global market is changing rapidly, and the world is a whole. Let us wait and see how the future will develop. Pay attention to "Tianzhi" to bring you a global perspective from different angles. #BTC创历史新高 #加密市场急升 #美国大选后涨或跌？
