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As US stock futures and the dollar surged in Asia on Wednesday, global markets are reacting strongly to the increasing likelihood of Donald Trump winning the US presidential election.
Investors are already recalibrating their portfolios in anticipation of significant policy shifts, with bullish sentiment driving action in key sectors, the dollar, and emerging markets.
deVere Group, one of the world’s largest independent financial advisory and asset management organizations, has been closely monitoring the potential outcomes of this highly unpredictable election cycle.
As Trump’s odds of victory rise, deVere predicts investors will continue to position themselves strategically to benefit from anticipated market gains.
Nigel Green, the chief executive of deVere Group, comments: “Wall Street is seeing renewed optimism as Trump’s pro-business policies are expected to boost various industries.
“His proposed tax cuts, deregulation, and infrastructure investments have long been viewed as favorable to corporations, driving a positive outlook for equity markets.
“Industrials, energy, financials, and tech stocks are likely to see the most immediate gains as investors anticipate growth-friendly policies.
“Industrials, in particular, could thrive under a Trump presidency as his administration would likely push for massive infrastructure spending. Energy stocks, especially in oil and gas, are expected to rise due to Trump’s deregulatory stance, favoring fossil fuel production.”
The dollar surged as Trump’s election chances increased, a trend that deVere expects to continue should he secure the presidency.
He continues: “With the possibility of Trump at the helm, the dollar is poised for further gains. A stronger dollar reflects confidence in US economic growth prospects under Trump’s leadership, attracting foreign capital and boosting the purchasing power of American consumers.”
While US markets may rally, emerging markets are likely to experience volatility as investors weigh the implications of Trump’s potential trade policies.
“Historically, Trump's protectionist rhetoric has sparked concerns over trade relations with key emerging market economies, including China and Mexico. This could lead to capital outflows from these regions as investors seek safe-haven assets in developed markets like the US.
“While emerging markets may initially suffer from the uncertainty surrounding trade policies, they remain a crucial part of a diversified portfolio. Investors should be prepared to take advantage of discounted assets in these markets once the dust settles.
“As ever, the key is diversification. As markets react to political outcomes, being well-positioned across a range of assets is crucial.”
Nigel Green concludes: “We’ve long maintained that the intersection of politics and finance can create unique opportunities for investors, and this election is no exception. No-one has a crystal ball but investors are preparing to position their portfolios for a Trump win.”
About deVere Group
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $12bn under advisement.
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