Altcoin News
  • A majority of Wall Street strategists are predicting either a static or slumping stock market following November’s election, regardless of who wins.
  • The outlook becomes even more pessimistic in the event of a contested election, with 80% forecasting a decline of at least 5%.
  • A Biden victory would be more harmful to the stock market, but strategists think even a Trump win wouldn’t be overly positive.

Wall Street strategists are predicting a stock market slump will follow November’s election, according to a new poll.

Only 25% of surveyed analysts expect a rally in the days following the presidential election, while 70% are forecasting either a downturn or a range-bound market.

The gloomy predictions hold even in the event of a victory for Donald Trump, who has mostly been kind to the stock market since his inauguration in January 2017.

Wall Street Prepares for Market Slump

Speaking to CNBC, 20 high-profile stock market strategists offered bearish forecasts for the weeks and months following November’s poll.

Seventy percent expect Joe Biden to reclaim the White House for the Democrats. Under this scenario, 50% of strategists expect the S&P 500 to drop in the first month after the election. Twenty-five percent expect a rally, while 20% expect a stable stock market.

Advertisement


Regardless of who the analysts picked for the election, eight are predicting a 5% decline for the S&P 500. Two are indicating a drop of at least 10%.

Assuming that the S&P 500 remains at today’s opening level of 3,397.16, a 10% decline would bring it back down to around 3,000. This would take it back to where it was at the beginning of March when news of the coronavirus began harming the stock market.

Stock market S&P 500 before November presidential electionStock market S&P 500 before November presidential election
The S&P 500 has hit record highs, but the election could derail recent progress. | Source: Yahoo!

Part of the negativity of the polled analysts comes from their expected results in November. Only 15% are predicting a clear, uncontested victory for Donald Trump. Assuming that he does win, 55% expect a stock market rally of around 5%.

The situation worsens if November’s election is contested. Eighty percent predict a stock market decline in such a scenario, with 25% expecting the fall to exceed 10%.

Trump Preparing to Contest Close Election

It may seem unlikely, but there’s more possibility of a contested election than in any previous presidential vote in recent history.

Trump has previously suggested that he may contest the election under certain circumstances. Here’s the response of White House press secretary Kayleigh McEnany to a recent question:

The President has always said he’ll see what happens and make a determination in the aftermath.

Then there are Trump’s tweets about mail-in voting. He has claimed that widespread postal voting would result in “the most corrupt election in our nation’s history.”

Trump mai-in voting tweet stock market slump November electionTrump mai-in voting tweet stock market slump November election
Trump suggests the November election could be rigged against him. | Source: Twitter

November’s vote may be close. Polls are predicting a Biden victory, but they also predicted a Clinton victory last time around.

If close, Trump may very well contest. More than any other outcome, this will almost certainly harm the stock market.

A Rough Ride Regardless

If November produces a clear Biden win, the polled analysts also expect the stock market to react disapprovingly. A significant reason for this is the belief that the Democrats will raise taxes.

November election poll of polls chartNovember election poll of polls chart
A poll of polls puts Biden ahead by 9.2 points. | Source: FiveThirtyEight

Some of the polled strategists believe that Biden’s approach to the coronavirus crisis could offset any adverse reaction to tax hikes.

Other analysts also think that the stock market doesn’t have much room to move upwards, even with a Trump win. Due to ongoing trade disputes (with China and Europe) and the coronavirus pandemic, the U.S. economy will continue to struggle. These circumstances could limit the stock market for the foreseeable future.

Advertisement

Last modified: August 24, 2020 3:44 PM UTC

Products You May Like

Articles You May Like

New Peer to Peer Exchange Provides Africans with an Alternative to Paxful
Chainlink Token Down 60% in Under 40 Days: Opponents Ask If the Bubble Has Finally Burst?
Joke MEME coin airdrop is now worth $600K
DeFi plummets: 3 reasons for the 46% correction from YFI, UNI, DEX tokens
Top On-Chain Analyst: Bitcoin Is Primed to Decouple From Legacy Markets
J. K. Rowling Didn’t Write Hogwarts Legacy but It Doesn’t Matter

Leave a Reply

Your email address will not be published. Required fields are marked *