With Kamala Harris in the White House, there could be significant changes in the economic and financial landscape.
As the November 5 presidential election heats up in the United States, investors are wondering where to invest with Kamala Harris as US president.
With an agenda geared towards environmental sustainability, social inclusion, and the modernization of infrastructure, her government could profoundly influence the global financial markets. However, investing in this context requires an in-depth analysis of the scenarios that could emerge depending on the configuration of Congress.
In this article, we will explore the main investment opportunities that could emerge under the presidency of Kamala Harris, taking into account her choices in fiscal, trade, and foreign policy.
Where to invest in stocks
Where to invest in stocks with Kamala Harris as US president? Before answering this question, it is necessary to clarify: according to a study by Schroders, over the past 96 years, when the S&P 500 has risen in the three months preceding an election, the incumbent president or party has been re-elected. If this is true, Kamala Harris could have a very good chance of becoming president if the Wall Street rally continues.
However, history also shows that stocks tend to rise regardless of who wins the election.
Since 1945, the average performance of the S&P 500 index has been positive by 11% under Democrats and 7% under Republicans, according to data from CFRA Research.
With an electoral program oriented to the revival of manufacturing production, the middle class, and the weakest segments of the population, fiscal policy will likely become more stringent for large companies, with an increase in corporate tax, and for the wealthiest classes. In this scenario, the most advantaged sectors are those supported by fiscal policies, such as those related to health care, electric vehicles companies, and residential construction. Harris has also promised new investments in sectors such as the aerospace industry, artificial intelligence and biomanufacturing.
Government bonds
Kamala Harris’ presidency could influence the bond market, with a more or less significant impact depending on the fiscal and monetary policies she will be able to implement.
A very expansionary fiscal policy could lead to a strong increase in public spending for investments in infrastructure, tax breaks for the green transition, healthcare, and social policies. The resulting increase in the public deficit will have to be financed by new issues of government bonds with adequate yields to compensate for the risk of greater debt and be attractive to investors.
Higher spending could then increase the expectation of future inflation, forcing the Treasury to offer higher long-term yields to protect against the erosion of purchasing power.
In this scenario, yields on long-term bonds (such as 10- or 30-year Treasuries) would rise faster than short-term bonds, leading to a steepening of the yield curve.
However, if the Federal Reserve were to maintain an accommodative monetary policy to support economic growth and financial stability, interest rates could remain low, limiting the rise in yields.
In addition, given Kamala Harris’ strong commitment to environmental policies, it is likely that securities tied to sustainable projects, such as green bonds, could attract increasing interest from investors.
Bitcoin and Cryptocurrencies
With Kamala Harris as US president, the Bitcoin price could rise. Recently, the Democratic candidate broke her silence on her stance on cryptocurrencies, declaring herself in favor of technological innovation and digital assets. While she has not yet shared a specific plan to promote cryptocurrencies, Harris has stressed the importance of the United States maintaining its dominance in blockchain technology.
Experts say that regardless of the election outcome, Bitcoin and cryptocurrencies are gearing up for a bull run, supported by a policy of high fiscal spending (and increased debt) that will increase demand and value in the long term.
BlackRock estimates that Bitcoin could establish itself as a global reserve currency, reaching $2.9 billion by 2050. Standard Chartered projects a Bitcoin price of $200,000 by 2025, regardless of who enters the White House.
US Dollar
Under President Kamala Harris, the dollar could weaken against other major currencies, especially in the context of falling inflation accompanied by new interest rate cuts by the Fed.
Kamala Harris’s trade policy, less hostile than Trump’s, also risks weakening the dollar, reducing the need for investors to look elsewhere for a hedge against volatility, according to Morgan Stanley. In any case, the investment bank’s experts warn investors of the volatility that awaits the currency markets in the run-up to the November elections.
Gold
Gold prices will also be affected by a Kamala Harris victory in the elections. An increase in government spending could lead to a growth in the budget deficit, increasing inflation expectations and uncertainty in the markets.
In this scenario, experts at Solomon Global are convinced that demand for gold, historically used as a hedge against inflation, could increase. This would push up the prices of the yellow metal.
Furthermore, changes in regulatory approaches, such as the increase in the tax on financial transactions, could make Wall Street unstable, moving capital towards assets considered safer, such as gold.
|DISCLAIMER
The information and considerations contained in this article must not be used as the sole or main support on the basis of which to make investment decisions. The reader retains full freedom in his or her investment choices and full responsibility in making them, since only he or she knows his or her risk appetite and time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public to save.|
Original article published on Money.it Italy 2024-09-29 07:49:00. Original title: Dove investire con Kamala Harris presidente USA
