Estimates of China’s stock market boom over Joe Biden’s victory in US Presidential election: According to the survey, Joe Biden’s chances of winning the Democratic Party in Presidential election are more
The presidential election is scheduled in the US on 3 November 2020. This will also affect the global market. Meanwhile, Asian money managers are working on traditional and non-traditional strategies to avoid any losses. Gold shopping is also being emphasized. This will create a hedge position. Actually, there is a possibility of an upswing in the global market due to the US Presidential election.
Effect of Election on Asian Assets
Some Chinese equities say that the impact of the election will be less on Asian assets. However, select investors are also suggesting a traditional hedge. For example, the yen (Chinese currency) and gold can be bought. In the event of heavy loss, investors will be less likely to lose.
The impact of Joe Biden’s victory
Mark Matthews, head of the bank Julius Baer & Co., says that if Joe Biden wins in the presidential election, it will be positive for China’s stock market. While Invesco and State Street Global Markets have consistently been in favor of Chinese equities. Because the economy of the country is accelerating.
Possibility of a slight decline in equity
The S&P 500 index is nearing its highest level despite political uncertainty. BNP Paribas Asset Management has turned to derivatives due to the possibility of a slight decline in US equities. Paul Sandhu, client advisory head for the company’s Asia Pacific region, said during the fall, investments would have to be made to earn some profits from the put and the call could be hedged by selling the gains in mid-November.
Gold buying advice
In addition, Adrian Zurcher, head of asset allocation at UBS Group AG, is optimistic about the coming months. But, keeping in mind the risks related to President Election, he says that we are advising investors to buy gold. And the option is said to include some linear equity exposure as well. This is expected to bring positive returns in falling and rising markets. Adrian Zurcher says that Trump’s win could see pressure on the Indian stock market against Hong Kong.
Bond Yield and Gold
Mark Matthews of Julius Bayer believes that cash or high-grade bonds are better hedged than gold. Because Gold has proved this year that it is more risk-free than risk-free assets. In addition, Paul O’Connor, head of multi-asset at Johns Henderson Investors, hopes to find fiscal relief under a strong Democrat government. This will increase the real bond yield. And this year’s win may reduce the assets. O’Connor estimates that the 10-year US Treasury Yield could increase by 1%. However, it will also depend on the relief provided by a strong Democrat government.
Joe Biden leads in survey
At the same time, Bank of America Corp. A survey of the US states that given the election fund managers around the world are ready for a huge decline in global markets. On the other hand, according to the survey in the US before the election, Joe Biden of the Democratic Party is more likely to win in the presidential election.