• Market analysts predicted choppy trading and sharp swings following the US presidential election.
• Donald Trump and Kamala Harris are locked in a tight race, fueling uncertainty among traders.
• One analyst said economic fundamentals matter more to markets than who becomes president.

Market analysts are bracing for volatility ahead of Tuesday’s presidential election as traders they mixed up their bets to a victory of Donald Trump or Kamala Harris.

The Republican and Democratic candidates are neck and neck in many polls, fuel the uncertainty in the financial world, who will emerge triumphant and darkens the outlook for everything from fiscal and trade policy to corporate regulation and geopolitics.

One analyst pointed out critical importance of the election in research notes on Monday, while another argued that economic fundamentals were more important for markets and predicted that long-term investors would likely gain over time.

Meanwhile, the Federal Reserve is expected to lower interest rates up 25 basis points on Thursday as China’s central bank is set to unveil some form of economic stimulus measures later this week.

Here is a summary of the analyst comments:

Naeem Aslam, Chief Investment Officer at Zaye Capital Markets

“US and European stock futures are trading flat as traders continue to focus on one thing and one thing only, the US election. Basically, there is nothing else that matters; it won’t be the earnings that move things in the markets, and it won’t be the raucous US jobs number that gets traders thinking about the US economy. The only thing that will keep them busy is the US election and who will become the next president of the most powerful country. in the world.”

Joshua Mahony, Chief Market Analyst at Scope Markets

“A shift in polls seen over the weekend signals potential for a Harris victory in Iowa; with an increase in the older female demographic signaling a shift that many believe could lead Harris to victory. Coming at a time when markets seemed to have taken a Trump victory for granted, the polls are a timely reminder that betting markets may not be the best predictor of who will become president of the United States.

“The election is looking much more of a contest than many expected, which could provide a more prolonged and volatile period ahead as we see potential recounts and challenges that may extend this process.”

Main asset management

“Despite short-term volatility, historical trends show stocks have consistently posted strong gains through the end of a presidential term, underscoring the benefits of maintaining a long-term investment perspective. The drivers of market performance—economic growth, corporate earnings, and innovation—ultimately eclipse the impact of political change.

“Investors should be cautious. Those who allow their political views to cloud their investment decisions may miss out on the potential rewards that come with staying invested in the market for the long term.”

Hal Cook, Senior Investment Analyst at Hargreaves Lansdown

“Since elections are effectively a coin toss, betting on a particular outcome does not seem sensible. Instead, remember that diversification is your friend.”

Kathleen Brooks, Director of Research at XTB

“The main US blue-chip index is up 20% year-to-date, which does not suggest the market is seriously pricing in the risk of civil violence after this election, which could rattle financial markets and cause a global risk wave. aversion.

“An interesting development leading into this election is that the financial markets expect Trump to win, and the Trump trade has performed well in recent weeks, as you can see in the chart below. Bond and crypto yields stronger With a day left in this campaign, the dollar is down and the dollar index is at a two-week low due to the sharp weakening of the dollar and intense volatility in the currency and bond markets.

“We expect Monday and Tuesday to be quiet for the markets, however, once we get the first trickle of results on Tuesday night and Wednesday morning, we expect fireworks.”