New York stocks brace for wild swings as Trump slips in election polls



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New York stocks brace for wild swings as Trump slips in election polls

The US President Donald Trump, who would be leading the Republican bulls in the November 2020 US Presidential election, appears to be in potential risk following the George Floyd protest, since the election polls had downgraded Trump’s point by 9 and widened Biden’s lead over Trump by 10 percentage points, eventually re-emerging headaches for the New York Stock Exchange investors due to Trump’s immense popularity among the US equity markets.

In point of fact, although the US stocks were surging and hovering closer to their all-time highs reached on February this year, worries over election-led volatility had revived over the recent past, as the Futures of the Cboe Volatility Index, widely contemplated as the most timely indicator for the Wall St.’s “fear gauge,” has been reflecting a notable uptick in volatility expectations ahead of the November US 2020 presidential election.

Election related swings in NYSE VIX futures rose three-fold of the levels seen on 2012 and 2016

If truth is to be told, a 45% winning chance in re-election bid of the US President Donald Trump, the market’s indubitable favourite who had yielded a number of policy changes including a lowering of corporate taxations alongside persistent push for a near-zero interest rate to accelerate the modern America’s market-oriented economy, had already raised a red-flag over the US stocks, since former US Vice President Joe Biden’s leadership would unlikely to continue the notion that Trump had been vying to instigate.

Adding further strains for the investors ahead of the 2020 US Presidential election, the election-linked risks founded in the VIX futures had jumped about three-fold of the levels experienced during the US Presidential elections of 2012 and 2016, a research report from Susquehanna Financial Group had revealed.

Aside from that, adding that a Democratic victory would likely to obliviate the market-friendly policy changes Trump had induced, analysts at Bank of America Global Research said in a recent client note, “A potential victory by Joe Biden ...

and to a greater extent, a ‘Democratic sweep,’ are generally considered more market-unfriendly outcomes.