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There’s considerable speculation surrounding tonight’s election outcomes, with economists, analysts, and the public envisioning different global scenarios depending on whether Republicans or Democrats secure the win.
Seventy-four percent of Americans feel the country is on the wrong track, with 50% of Harris supporters sharing this sentiment, compared to 98% of Trump’s. This puts Harris in a challenging position as part of an unpopular administration, limiting her ability to campaign on “new leadership.” Her slogan, “New Generation of Leadership,” attempts to bridge this gap.
Despite this, Harris is leading in four out of seven key swing states likely to determine the election’s outcome. Still, other sources report razor-thin margins between the candidates.
But why does this election matter more than the previous ones?
The rising geopolitical tensions in different parts of the world need resolution, and the administration in the U.S., currently the largest economy in the world, may determine the fate of each of these conflicts. In other words, depending on who the leader is and their leadership direction, there will be ripples that change the direction of everything.
There is also a rise in tensions regarding democratic rights in America. As seen in the news, extreme riots are occurring between voters as they aggressively support their respective candidates. There were even reports of some protesters setting mailboxes and ballot boxes on fire.
Not to mention, we consider the global economy and existing international trade relations. Will they continue to maintain power to control disputes through sanctions, or will we re-enter an era of shows of force for supremacy and power?
The new administration will also determine if it will be hindered by the growing presence of BRICS, which aims to lessen U.S. influence over other countries and the global economy by opening their borders and trade to new member countries.
There are plenty of other points to discuss regarding this, but the impact of today’s election is significant, as it will determine how everything will be approached.
Market Direction and Expectations Based on a Harris or Trump Victory
Analysts suggest that Trump’s positions on tariffs and taxes could strengthen the dollar. In a Barron’s article, J.P. Morgan strategists caution that a Trump win may reintroduce inflation by 2025 or 2026 due to “looser fiscal policy,” which might encourage investment in stocks, oil, and economically sensitive commodities like copper, while fixed income and precious metals could lag.
On the other hand, a Harris win might support a rise in gold prices. Yahoo Finance’s Beck cites Matthew Jones, a precious metals analyst at Solomon Global, who expects a Harris administration could lead to higher gold prices due to anticipated government spending, inflation, market volatility, and regulatory changes. However, the exact impact will hinge on her policies and the markets’ response.
By: Tim Figueroa, Market Analyst
