What will happen in the market?
I think pollsters have been conservative and that no 'shy Trump' voters are there. That's going to mean a fairly quick win for Biden and a majority in the Senate. Still, it's a tragedy to get the news right and the trade wrong.
What do you think will benefit from a blue wave win? We will look at other scenarios later. Some brainstorming:
- Gold (stimulus spending)
- USD lower (better growth)
- MXN and CAD higher on more US spending
- US oil companies lower
- Firearms makers higher (people buy guns in Democratic admins because they think they will be taken away)
- Positive for equities on a quick decision and stimulus spending
- Positive for emerging markets (trade, stimulus)
- Positive for green industry
Of all the trades, I think gold is one of the most straight-forward and it's also a call option on disarray and some other tail risks. I'm much less confident about the US dollar and can see some money chasing US-assets no matter what the result.
What about you? What's the trade?
