While it is unclear whether Donald Trump or Kamala Harris will become the new president, there is increasing evidence that the election may stimulate financial trading activity. This is good news for citigroup (C.N), goldman sachs (GS.N), and jpmorgan (JPM.N) and other major banks.

Historical precedents are one reason. According to Mergermarket's statistics, in past election years, merger and acquisition activities typically decline in the third quarter (pre-election) and rise in the fourth quarter. In the past four election cycles, trading volumes decreased in the third quarter three times, while they increased in the fourth quarter three times, with exceptions including the 2008 financial crisis and the 2020 COVID-19 pandemic.

Although Mergermarket points out a slight decline in overall merger and acquisition activities compared to the same period last year, the investment banking business of large banks remains strong. Citigroup and Goldman Sachs stated this week that the expenses of their investment banking businesses increased by 44% and 20% year-on-year respectively. This growth trend follows JPMorgan and Wells Fargo & Co's reports from last week, with increases of 30% and 37% respectively.

Many analysts believe that regardless of whether Harris or Trump wins, the political environment for major transactions will improve. President Joe Biden will make robust antitrust enforcement a hallmark of his administration, having appointed two staunch enforcement officials - Lina Khan and Jonathan Kanter - to lead the Federal Trade Commission and Department of Justice's antitrust division.

Now, some business leaders believe that Harris will slow down aggressive enforcement and may even replace Lina Khan. Several major Democratic donors, including LinkedIn co-founder Reid Hoffman, publicly stated that Harris should do so, although Hoffman later clarified that he had never directly discussed this with Harris.

Analysts from Signum Global Advisors wrote in a report on Wednesday, "It is unprecedented for a new president to retain a chair who has served a full term." They added that Harris is more likely to appoint other Democratic commissioners as chairs.

Such changes would be welcomed by some large technology companies and other major corporations. As chair of the Federal Trade Commission, Lina Khan opposed deals that some other chairs might have approved. She has sued or investigated tech companies like Amazon (AMZN.O) and Meta Platforms (META.O), and filed lawsuits to block the merger of the kroger and Albertsons.

The scrutiny of large technology companies has satisfied some conservatives, although they also criticize these companies. If Trump wins the election, Lena Khan and Jonathan Kant are likely to be replaced. Although Lena Khan agrees with some Republicans on antitrust issues, as the chair, she also controls the FTC's other regulatory agendas, which is unacceptable to Trump, Beacon Policy Advisors wrote in a research report.

Beacon stated earlier this month: "If Harris fails to win, it is almost certain that she and Kant will not continue in their positions."

Trump has not clearly stated his stance on antitrust plans. In an interview at the Chicago Economics Club earlier this week, Trump did not directly respond to whether he supports the Department of Justice's suggestion that the court may dissolve Alphabet (GOOGL.O). He said he would "take action" to address the company, but believes Google can become "fairer" without being dissolved.

Under Trump's administration, anyone replacing Lena Khan may not be as "lenient" as traditional Republican candidates, Beacon wrote, but for Wall Street traders, this unknown situation may seem more attractive than the current one.