The U.S. presidential election situation is stalemate, and the global market is uneasy on the 4th. Many countries remind investors that the financial market will fluctuate sharply during the US presidential election and that risks should be carefully assessed. On the 4th, the European and U.S. stock futures markets fluctuated throughout the day. The Nasdaq hit a circuit breaker in the early trading and continued to fall and rose again by over 4% in the evening. As of press time, the three major U.S. stock indexes have all increased by more than 1%.
The US CNBC website stated on the 3rd that in the short term, the biggest risk is how long it will take for the election results to be clear. Once the election results are delayed too long, or there is a so-called “controversial election,” the uncertainty that investors fear will make the U.S. stock market likely to return to turbulence and decline soon. Polkari, a senior market strategist at SlateStone Wealth Management in the United States, believes that if the results show that Biden won by a small margin, the Republicans may sue, and if Trump wins by a narrow margin, the Democrats may also sue. In this way, it will cause anger and anxiety in the market. If this happens, the market will fall by 3% too conservatively, and it should fall by 5% or 7%.
The British “Financial Times” said on the 4th that the market expected that the voting results would lead to a substantial increase in the volatility of major currencies against the US dollar. The euro’s “overnight implied volatility” (an indicator that tracks options market transactions) rose more than three times, and the yen’s indicator rose even more. The report also said that investors are preparing for the renminbi to fluctuate sharply after the US election. On the 4th, the exchange rate of the renminbi against the U.S. dollar turned up, the onshore renminbi rose by about 700 points from the intraday low, and the offshore renminbi rose by 1,300 points against the U.S. dollar. Udin, chief economist at the Bank of Singapore, said that the market is concerned that the clear winner of the US election may take a few days to be determined, but he added that due to the outstanding performance of the Chinese economy, the yuan will continue to be bullish in the longer term.
The Chinese stock market closed higher on Wednesday and was not significantly affected by the US election. The Shanghai Composite Index closed at 3,277.44 points, up 0.19%, the Shenzhen Component Index closed up 0.59%, and the ChiNext Index rose 0.23%. According to Reuters, bank stocks have provided support to China’s stock market, and investors seem to be indifferent to the suspension of the listing of Ant Group. At the same time, China’s October Caixin service industry PMI index was strong, which boosted sentiment.