JPMorgan Chase & Co believes that the US election will only have a short-term impact on the stock market. Future stock market gains are more linked to liquidity (rather than fiscal stimulus), and US stocks still have 50 per cent room to rise in the medium to long term, stimulated by central bank liquidity.

JPMorgan Chase & Co said that the uncertainty of the election result reduced market expectations of large-scale fiscal stimulus in the future, superimposed a second outbreak in the United States, which led to the recent market correction. Unlike the September correction, equity-focused hedge funds have had a limited impact on the market in this correction.

JPMorgan Chase & Co analysis believes that as the US election results are about to be announced, the uncertainty of the market will fade, and the recent stock market correction will provide investors with a medium-and long-term buying opportunity.

Measured by quantitative indicators, JPMorgan Chase & Co believes that the current allocation level of global non-bank investors to stocks is still significantly lower than the average allocation level after the collapse of Lehman Brothers in 2008, and much lower than the cyclical allocation peak of 2018. This means that there is still a huge allocation space in the stock market.

From a medium-to long-term point of view, JPMorgan Chase & Co pointed out that the rise in the stock market depends more on debt levels and market liquidity, as well as quantitative easing by the central bank rather than fiscal stimulus.

Although this does not mean that the fiscal stimulus after the US election will not have an impact on the market, it does consider the restrictions on the resurgence and revival of the epidemic in the United States and the weakness of US economic growth.The Fed is likely to introduce more quantitative easing in the future to inject more liquidity into the market, thus pushing the stock market higher.