Trump, Biden whatever

As crazy at it might sound, the outcome of the presidential election in relation to the short till mid term market development doesn’t really matter in my opinion. The market is currently still on drugs and the outcome of the US election won’t change anything about this fact.

The hope for fast economic recovery supported by stimulus currently outperforms the reality.


If Biden wins the election like it looks like at the moment, that would be okay. The last week many market participants were already sure that a Biden win in November is getting priced in right now. Equity prices surge even with the fact that Biden is the less favourable option when it comes to his more social related and much higher tax rates for wealthy people policy.


For the stock market you could even argue that Trump would still be the better option but if we see the whole picture one has to admit that a Biden administration would be more predictable than the Trump administration was the last 4 years.

But even if Trump once again gets the impossible done and wins the election that wouldn’t be bad either. As I already mentioned before the market is still on drugs, which are built on stimulus and liquidity hopes. Here is why.


Last week president Trump announced that there won’t be any stimulus deal between Democrats and Republicans before the elections and within that before January.

Bad news first, but it seems like he is already crazy about it and offers his own compromise proposals and promptly announced that he would be ready to make even bigger packages than the Democrats. Those fast changing basic attitudes aren’t really easy for market participants to handle at the moment.


Trump is Trump and known for his business friendly policy, which is naturally good for businesses and what is good for businesses is also good for the stock market.

If Biden wins the election that would be the more worse option for market participants but it seems like that doesn't matter right now, cause if Democrats win the election we could potentially see a much bigger stimulus package in January.


And if anything unexpected happens in between then and then, there is also Mr. Money Printer himself, Jerome Powell, who already signaled his willingness to help even more and above that he already was like begging the negotiating parties to finally decide on a stimulus deal, as the Fed only has lending, not spending powers.

More fiscal stimulus and monetary liquidity will come.

The question is only when, before the election or after it in January, but definitely in Q1 2021.


It looks like a Win-Win-Win situation whatever happens. For now it looks like there is no possible scenario in which the stock market could see longer term weakness, because equity prices are supported by the prospects for more monetary and fiscal policy measures.


Looks like it’s once and again: Buy the freaking dip !