With the world waiting for the final outcome of the US election today, the market had long thought Mr Biden a long shot, and a turning point appeared to be in sight.
How big is the impact on the stock market?After U.S. stocks have been out of the capital market “biden trade” mode, this is mainly thanks to Joe biden, one of the important keywords of green New Deal “clean energy”, so the new energy vehicles and photovoltaic continue higher, also drove the a-share stocks rally, stocks infrastructure related shares also strong, thanks to Joe biden during the campaign announced A 10-year $1.3 trillion infrastructure plan.
If Biden wins, what will happen to the stock market?
1. Improving the risk appetite of THE US stock market and even the world, which is good for A-shares.
2. Economic stimulus boosts US economy.The US government is expected to launch A massive economic stimulus policy, which will continue to benefit clean energy, transportation and infrastructure, as well as a-share photovoltaic, wind power and new energy vehicles.(But also be aware of the risk of cashing in.)
3. Biden’s re-formulation of foreign policy towards China, China’s accelerated repair of exports to the US, and the arrival of spring in technology stocks are favorable for A-shares.
What if the mad King wins a second term?
The epidemic in The US will continue to spread, with little hope of improvement and an economy that will be unable to repair in the short term, relying on a buffer of private savings built up after the first fiscal stimulus, and which will be in a mess until mass vaccination.
The fiscal stimulus is expected to be less than $1 trillion, less than the amount Democrats are pushing for in office. If pressure is applied to the Fed, it could exacerbate fears of an economic downturn, and U.S. stocks could be more volatile at higher levels.
The US economy is none of our business. The key is our strategy towards China.Trump will continue to pursue unilateralism and trade protection, so he will continue to be tough with China in the areas of economy, trade, science and technology, finance, military and foreign affairs.
For example, we see trump may counter attack, the semiconductor plate appeared in different degrees of diving, Sichuan University nearly impact trading limit.
In the short term, markets worry more about uncertainty than about the outcome of the election.Whichever old man wins the election, it’s more important to us that the boots finally fall.Before the market has been it as A time bomb, also affected the liquidity of the market, A has been in shock, with the landing of the election, A shares will also begin A new round of trends, New Year market can be.
As for whether the reappointment of the crazy King will bring down the tech stocks, Brother Dao thinks not.Because:
First, technology stocks have been adjusted for several months in a row, some high valuation of the variety in time and space have been digested, some core vote began to stabilize, if the short term by the United States election drag, will emerge a better low absorption opportunities.
Second, in terms of performance, semiconductor, consumer electronics maintain rapid growth, will have a good growth rate next year.The overall performance of the computer industry is expected to be poor, coupled with the computer industry in November entered the peak of the year to lift the ban, more institutional capital outflow, performance problems will be improved next year.
Third, scientific and technological innovation became the core industrial policy main line during the 14th five-year Plan period, and the innovation industry entered the performance release eve.Scientific and technological development is not only the 14th to the 5th priority, but also the “major breakthroughs in key core technologies” is also the 2035 target.
Therefore, no matter who is elected, the impact on the market will be short-term emotional, and the tone of the US policy towards China will not change, which will also push the game between China and the US to a new stage.
Even if Biden is elected, the benefits to our technology and trade will be only temporary, and the science and technology race and arms race between China and the United States are only just beginning.And even with Trump’s re-election, we’re so used to his drama of sexual harassment that it’s hard to play a new card.
So don’t be afraid, the army will block the water, boots landed, A shares finally to choose the direction.