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By James Blacker, Benzinga
U.S. stocks seem to be recovering following a recession scare in July that saw the S&P500 falling nearly 10% from its all-time high. The index has now risen almost 10% since the August 5 low, with the rebound partly driven by a series of economic reports this month on retail sales, inflation and producer prices, which have raised expectations that the Federal Reserve will cut interest rates later this year.
However, with Vice President Kamala Harris set to square off against former president Donald Trump on November 5, analysts are warning that there could be more market turbulence yet to come, particularly with Harris leading in many polls after replacing President Joe Biden as the Democratic nominee.
Election years typically bring volatility to global markets, and as election day looms, traders can expect to see intensifying fluctuations and shifts in investor sentiment. In fact, in a survey published by JPMorgan earlier this year, 20% of traders said they expected the election to be the biggest driver of stock movements this year.
Why Elections Affect The Stock Market
Presidential elections have wide-reaching ramifications for businesses and the economy, as they typically result in policy changes that can have a significant impact on various sectors. For instance, policy changes in healthcare can impact pharmaceutical stocks, while shifts in energy policy could affect oil and gas or renewables companies. Regulatory changes, fiscal policies, trade agreements and spending priorities can all be affected by election outcomes, creating both risks and opportunities for investors.
Additionally, with so much uncertainty surrounding the future of the economy, global markets tend to be highly volatile as investors react to the latest polling data and presidential debates. This can potentially mean big price swings, making it crucial for traders to stay up to date with all the latest developments.
During election periods, many traders tend to flock to commodities, indices and FX. In 2016, for example, after the UK’s referendum to leave the EU, the Germany Dax 40 index was the most traded instrument and the EUR-USD pair was the second most in demand instrument.
How To Trade During Elections
A golden rule for traders and investors is never to allow your own political views to inform your investing decisions. According to surveys conducted by the Pew Research Center, Democrat-aligned voters view the country’s economic condition as good under a Democratic president, while Republican-aligned voters rate the economy positively under a Republican president. This is despite the fact that average annual returns on the S&P500 were similar under both Obama and Trump, at 16.3% and 16%, respectively.
Trading during an election year requires taking a strategic approach. With the right tools and strategies, investors can turn the heightened volatility into an opportunity to profit. Having access to reliable, real-time data and predictive analytics is crucial to making informed decisions. VantagePoint, a leader in A.I.-driven market forecasting software, can provide the insights needed to navigate the year of elections.
Preparing For The 2024 Election With VantagePoint’s A.I. Software
VantagePoint uses trained neural networks to provide traders with what it says are highly accurate, predictive forecasts of primary markets. These forecasts are based on intermarket analysis, meaning that the software compiles and analyzes data about the interconnectedness of global markets to detect hidden patterns that are undetectable by humans.
Whereas traditional lagging indicators such as moving averages are simply a reaction to past price action, VantagePoint says its leading indicators can generate market predictions with up to 87.4% accuracy, and give you a head start on other traders.
VantagePoint can also help you find exactly what to trade. There are thousands of securities to choose from, and it’s often the biggest decision you make as a trader.
VantagePoint’s software helps you make asset selections, pinpointing the best stocks and options to trade. It even works with forex, crypto, futures and commodities.
With VantagePoint's Intelliscan, you can quickly identify assets with a high potential to take off. The company says that this advanced scanning tool evaluates thousands of assets, highlighting the best stock and options opportunities.
With clear, actionable insights, you can confidently target what to trade, armed with knowledge that helps you identify which stocks are likely to rise and which ones to avoid. This means you can potentially make smarter trades and maximize your time while minimizing effort.
Traders and investors looking to get an edge in the markets during the election year could consider incorporating VantagePoint’s software into their trading strategies. With its A.I.-driven forecasts, traders can get a better understanding of future market movements and position themselves for success.
VantagePoint is currently offering a free guide, called Electionomics 2024, which provides trading strategies that can maximize your profit during the election season using predictive artificial intelligence.
For more information on VantagePoint, visit www.vantagepointsoftware.com.
Featured photo by Tumisu from Pixabay.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains advertising content. This content is for informational purposes only and not intended to be investing advice.
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