Markets

No campaign fever on Wall Street

I.Elections in the United States are in ten days and the campaign is in arguably its hottest phase. In their second TV duel on Friday night, incumbent President Donald Trump of the Republicans and his challenger Joe Biden of the Democrats faced each other again. Trump insisted on positioning himself as the clear favorite of the stock exchanges. “They say that if I get elected, the stock market will boom,” said Trump. If Biden is elected, he predicts, the stock markets would “crash”.

No one on Wall Street is surprised anymore by the apocalyptic stock market scenarios that Trump likes to draw in the event of a Democratic election victory. But the fact that the stock exchanges are “crashing” does not seem to be pricing in at the moment – Democrat Biden is ahead in many surveys.

Who moves into the White House is irrelevant in the short term

Instead, investors stayed low this week. Whether Donald Trump will stay in office for another four years or Joe Biden will move into the White House seems irrelevant in the short term. According to Esty Dwek from Natixis Investment Managers, the next fiscal packages to combat the consequences of the pandemic are particularly important for the reaction of the markets. And these would come in any scenario. A little more with a completely “blue” government, a little later when the White House and Congress are not led by the same party. Dwek therefore recommends ignoring the noise of the next few days until the election.

On Wall Street, that was apparently followed. The Dow Jones index of standard values ​​barely moved over the course of the week. The more widely diversified American share index S&P 500 rose only slightly.

And in Europe, too, the stock exchanges are currently less dominated by the American election campaign than by the high number of new Covid-19 infections, as many market participants are more afraid of renewed lockdowns. In Europe, almost all price boards have turned red this week. At the end of the week, the leading Eurozone index Euro Stoxx 50 was able to make up for some losses.

In Germany, the Dax stock market index still indicates a minus of around 1.6 percent on a weekly basis, despite the catch-up on Friday. Less than ten Dax values ​​close the week with a positive sign. The DAX newcomer Delivery Hero and the software company SAP were particularly hit and miss, with losses of more than 11 and 5 percent respectively.

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