The US Election and Financial Markets
Explore the intricate relationship between US Presidential elections and their influence on the global financial markets.
- Of the past six administrations, the dollar performed best under President Clinton, gaining 19.61% in value.*
- The dollar performed worst under President W. Bush, losing 22.00% in value.*
- In aggregate across all Republican terms, the dollar lost -36.17% in value while gaining 54.37% while under Democrat leadership*
*tradingview.com 01/20/1989 - 05/28/2024. Past performance is not indicative of future results.
Download our special report on the US election
Our elections report is a deep dive into all the data you may need to trade the US election smarter. As Kamala Harris and Donald Trump prepare to go head to head, there’s no better way for traders to ensure they are prepared to react to the markets.
Key Economic Metrics to Follow in the 2024 US Presidential Election
Monitoring these indicators can provide insights into the economic landscape and guide investment decisions during the election period.
- GDP Growth: Reflects the overall health and productivity of the economy.
- Unemployment Rates: Indicates the labor market’s strength and economic stability.
- Consumer Spending: A measure of economic activity and consumer confidence.
- Inflation: Shows price stability and purchasing power.
- Consumer Confidence Indices: Reflects economic sentiment and future expectations.
- Business Investment Levels: Indicates confidence in economic growth and stability.
- Government Policies and Fiscal Measures: Can significantly influence economic indicators and market stability.
What Trump’s Second Election as US President Might Mean for Financial Markets
If Trump is re-elected, his administration is expected to continue with the “America First” policies, which could lead to increased market volatility. Key areas of impact include heightened trade wars, especially with China, and ongoing tensions with NATO allies regarding defense spending. Sectors such as technology, manufacturing, agriculture, and retail might be significantly affected by these policies.
- Trade Wars: Potential for increased trade tensions, particularly with China.
- NATO Pressure: Continued demands on NATO allies for higher defense spending.
- Market Volatility: Aggressive and unpredictable policies could lead to market instability.
- Sectoral Impact: Technology, manufacturing, agriculture, and retail sectors might face significant effects.
- Global Trade Shifts: Potential changes in global trade dynamics and supply chains.
What a Harris Presidency Could Mean for Financial Markets
Kamala Harris ascending to the U.S. presidency could bring significant changes to financial markets, with her progressive stance likely influencing various economic and regulatory policies.
- Regulation: Potential increase in financial regulation, especially concerning big tech and consumer protections.
- Healthcare: Strong support for expanding healthcare access, possibly impacting healthcare stocks.
- Tax Policies: Higher taxes on corporations and wealthy individuals, with implications for market sentiment.
- Social Justice Initiatives: Focus on racial equity and social justice could influence labor markets and corporate policies.
Non-Farm Payroll
With the buoyancy of the labor market often used to judge the health of an economy, what did job openings look like across the past six administrations?
- Discounting the effect of various economic events, Democrats created more jobs than Republicans*
Gross Domestic Product
Positioned as the ultimate measure of economic productivity, how was gross domestic product affected by each president, respectively?
- To-date, President Biden boasts the highest average GDP gain*
Inflation rate
With inflation intrinsically linked to monetary policy, how well has each president kept inflation at the target 2% historically?
- While in office, President Trump kept inflation closest to the US target of 2%*
- Despite being the worst-performing currency as of March, the Australian dollar finished 2020 as the best-performing currency, up in value by 11.64%*
- The dollar holds the title as the worst-performing currency of 2020, down -7.66% in value across the year*
- Between Biden’s official confirmation as victor and year end, the dollar continued to lose over 2.50% in value*
*tradingview.com. Past performance is not indicative of future results.
Client Sentiment
How are other traders positioned ahead of the US Election?
Client Sentiment is a tool offered by OANDA by showing the current long vs. short bias of all open positions held by real money OANDA clients.
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Past performance is not indicative of future results.
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