Source: Jin10 Data
Author: Wu Yu.

Barclays analysts say that after the US election, the market may experience a moderate rebound, with bond yields and stock prices rising.

Barclays analysts led by Ajay Rajadhyaksha believe that the voting on November 5th is likely to achieve a "smooth transfer of power", as they think concerns about political unrest seem to be "exaggerated".

Barclays analysts stated: "Our view is that in the majority of results after the November 5th election, the market's subconscious response should be a mild relief rebound, as a smooth transfer of power is just around the corner."

Analysts believe that institutions in the USA are strong enough to ensure a peaceful transition. They think the macro impact of any protests that supporters of Trump or Harris may launch should be "minimized".

"Of course, there may be parties dissatisfied with the results who may protest. But even if these protests are unsettling, we believe the macro impact should be minimal, and the financial markets and investors will continue to move forward," they added.

Analysts pointed out that the market has been relatively calm in the face of the uncertainty of the results of the USA election.

"In December 2020, despite former President Trump's claims of widespread election fraud in mail-in and early voting, the stock market still rose that month," Barclays analysts noted.

They believe that the most likely scenario to cause market concerns is the so-called 'Blue Wave', where the Democratic Party wins overwhelmingly, as the Democrats may push for increases in corporate and individual income tax rates.

Barclays analysts stated: "In all other outcomes, whether it is Trump or Harris winning, or 'Red Wave' or Congressional split, we expect risk assets to immediately rebound afterwards."

"We believe that financial markets will remain calm and continue to move forward, and investors should do the same."

Editor/Jeffy