"Volatile markets for days or potentially weeks": industry specialists react to US election news

The US election is reaching its critical moments as President Donald Trump and Democrat candidate Joe Biden go head-to-head.

The vote count, which has gone on through the night and been watched by the world, has seen a tight battle across key states for both candidates.

President Trump made an announcement earlier this morning prior to the votes all being counted. It is expected that it could be days until the final result is known, but the uncertainty and closeness of the race has caused disruption in the global markets.

Business specialists spoke to Bdaily about how the US presidential election is affecting markets around the world.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown

“With Donald Trump already claiming victory even though millions of votes are still uncounted, investors may have to belt up and brace themselves for some volatile sessions of trading ahead.

“So far, as trading has got underway in Europe, investors seem to be adopting a wait and see approach, as it is likely to be many hours and possibly days before all states tally all the ballots.

“With a high number more votes cast this year, and many more by mail because of the coronavirus, the process could be long and protracted.

“With the outcome potentially in doubt for days to come US equity futures have already been swinging, but tech stocks gained, with NASDAQ futures rising by more than 3 per cent at one point before easing back, on speculation a Trump win could benefit the sector.

“The dollar has also lifted against the euro and with uncertainty the name of the game there are signs some investors are ploughing into safe haven bonds, with yields on US treasuries falling back.”

Russ Mould, investment director at AJ Bell

“Trump declaring that he has won without all the votes being counted caused turbulence on the markets.

“While perhaps characteristic of Trump’s typical behaviour, it wasn’t what the markets were expecting and so we’re experiencing wild swings in asset pricing.

“Chaos is the last thing people want, particularly when coronavirus is causing so much disruption to the world. We’re now facing the prospect of volatile markets for days or potentially weeks until the election is sorted out.

“Trump’s actions raise the chances of the election result being fought out in the Supreme Court, thus prolonging the outcome, and causing more uncertainty which markets hate.

“Leading up to election day markets had been pricing in a Biden clear sweep, with the dollar falling on expectations of very large fiscal stimulus.

“Even if Biden does win the presidential election, a scenario with the Republicans in charge of the Senate could mean delays to the stimulus bill and for it to be much smaller in size than if the Democrats had a majority position.

“Notably building products firm CRH, an expected beneficiary of infrastructure spending across the Atlantic, was lower in early trading in London.

“The dollar has subsequently bounced back to reflect the potential change in the outcome of the election.”

Duncan Grierson, founder of Clim8 Invest

“Should Trump win, his re-election will be nothing short of an environmental disaster.

“He spent his first 4 years in the White House dismantling over 100 pieces of legislation that protect the environment including relaxing standards on tailpipe pollution, removing strict limits on emissions from coal and gas-fired plants, and pouring hundreds of billions of dollars into fossil fuel subsidies.”

“What is remarkable, is that he is not promoting clean energy. This is the largest wealth creation opportunity of our lifetime.

“The technologies for wind and solar energy are now economically viable and there is an opportunity to create millions of new jobs through the transition to clean energy.”

“Conversely, a Biden victory will be a victory for the planet. But, it’s easier to smash a plate than to remake it. It will take some time to reverse the harm of Trump’s administration.

“The good news is that Biden has committed to the US rejoining the Paris Climate Agreement, which he can do by simply sending a letter to the United Nations Secretary-General.”

More to follow.