A possible Trump election victory in 2024 will not have as strong an impact on stocks as in 2016 – Commerzbank
It has turn out to be an increasing number of possible that Donald Trump may per chance per chance be the Republican candidate in the presidential election in the fall and that there will possible be a repeat of the 2020 duel: Joe Biden in opposition to Donald Trump. Economists at Commerzbank analyze how a Trump victory can even impact stock markets.
One other stock market rally?
In November 2016, the stock markets reacted positively to Donald Trump’s election victory, as the unique US president promised companies decrease taxes and now no more regulation, among various things. On the other hand, a need of factors counsel that the stock markets would no longer welcome a Trump election winner with identical euphoria.
As an illustration, fragment valuations in 2024 are enormously elevated than in 2016, when merchants paid a heed/earnings ratio (P/E ratio) of 17 for the S&P 500 and 18 for the Nasdaq 100, while the latest S&P 500 P/E ratio is 20 and the Nasdaq 100 P/E ratio is 25.
To boot, there used to be a high stage of uncertainty and nervousness in the stock market in 2016 in the tear-up to the presidential election, and the implied volatility VIX for the S&P 500 used to be on a conventional foundation above 20. We survey the latest VIX stage of 13 as a signal that many merchants are rather carefree about Trump winning the election in 2024.
We demand of that a possible Trump election victory in 2024 won’t fetch as strong an impact on the stock markets as in 2016.
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