How should libertarians react to Trump's election?

US election: Trump versus Biden - what does that mean for investors?

On the night of October 23, the last TV duel between the applicants rose. The debate was eagerly awaited. Because for the final phase of the election campaign, the question arises: Can Trump turn things around again and still get his reelection? The TV duel can be decisive for the US election: The voters who have not yet decided who to vote for in the US election could be given the decisive arguments here.

During the US presidential debate in Nashville (Tennessee) on Friday night, strict rules applied this time. The microphones of the two have been partially muted so that the presidential candidates cannot simply interfere with their respective opponents - an innovation that was primarily seen as an anti-Trump rule.

In the first debate, you could see how Trump kept interrupting his challenger, himself the TV host of the duel seemed powerless against it. Biden was also visibly annoyed, hurled a “shut up” at Trump. He also sharply criticized US President Trump in other respects, but hardly ever called him by name. Most of the time Biden only spoke of “him” or “this man”.

What does the US election mean for investors?

But it is already puzzling how the US election ends: What do the polls say? What if Trump wins? What does a victory from Biden mean for the stock market? Which industries are particularly affected by the US election? And what about an unclear election result in the USA?

In any case, the election of the US president is already having an impact on the economy: the world's most important stock exchanges are booming. Even professional investors are sometimes frightened as soon as they are US President Trump tweeted - and occasionally utter threats there. The current corona crisis does the rest because the further development of the Covid 19 pandemic and its effects are not yet very clear.

First of all, the most important thing: The US election need not cause investors much concern at all. But there are different scenarios for possible election results.

Update on the situation here

What if Trump wins?

US President Trump always likes to present himself as a friend of the economy and as a “dealmaker”. In fact, he has cut taxes and relaxed government regulations for companies and individuals in the United States. Accordingly, the US President is convinced that the positive development on the stock exchanges is mainly due to him. In particular, the Trump camp keeps turning into the Technology industry listed, which in fact posted strong price gains in recent years.

In the event of an election victory, Trump is likely to want to continue here. Support for the US economy is also likely to be Trump's promise to provide more trillions to help in the corona crisis: The US president recently announced that he was ready to spend more than 2.2 trillion dollars on it. Before that, however, he had negotiated a Another aid package stopped. He had announced that this would only take place after the elections.

At a Re-election of Trump Companies that rely on regenerative energy generation are likely to have a hard time in the USA. The US President emphasized in the TV duel: Wind power is still a long way from being mature, and he also cited as an argument against this technology that the systems would come from Germany or China. He, on the other hand, relies on the traditional oil industry from the southern United States. Speaking of Biden's plans, Trump said, "What he's saying is that he's going to destroy the oil industry."

In addition, has Trump's America First Course had little positive effect on world trade. Trump also repeatedly used punitive tariffs and protectionism as a threat - against China or the European Union, for example. The German auto industry, which was in a more difficult position after the emissions scandal in the USA, was also affected.

What does a victory by Biden mean for the stock market?

US President Donald Trump keeps painting a bogeyman on the wall: "If Joe Biden wins, the stock markets will collapse." Biden's election victory would be “a very, very sad day for this country,” said Trump once again in the TV duel. He accuses his opponent of being a socialist - and striving for nationalization in some areas.

But such a thing is not to be feared. The “Handelsblatt” even describes that the financial sector sees a more reliable US president in Biden than in Trump: “In addition to the infection of the president and around a dozen of his employees, many also see the back and forth about a new stimulus package, about which Trump is in Will not negotiate entirely until after the election on November 3rd, as a clear warning sign. Instead of another four years under an erratic president, many investors are longing for more stability from Washington. ”

Biden has announced that it will raise corporate income tax again - and also private individuals with annual income of $ 400,000 or more tax more heavily. Trump took up this point in the TV duel again - and threw his opponent on the head: "He would like to increase taxes for everyone".

The Democrats around Biden have also already announced that they will respond to the corona crisis with another economic stimulus package - and support the economy with such trillion grants. There is no big difference to Donald Trump here, but Biden is now seen in business as more reliable.

In addition, there are quite a few industries that should look forward to Biden’s election victory: it is certain that he will drive the topic of sustainability forward - good news for all companies that are committed to the protection of resources and social responsibility. The technology sector should also benefit from this, because many sustainable developments are primarily based on smart technology and innovation. The Pharmaceutical and health industries happy because Biden would like to address the issue of health insurance and coverage in the event of illness more strongly. Also in the TV duel, the candidate emphasized once again: "Everyone should have the right to affordable health care."

What matters in the US election

When it comes to the results of the US election, however, it is not just about who becomes president - it is primarily about how. Because on Election Day (November 3, 2020) will not only be voted on the new US president. That too House of Representatives and a Part of the Senate are newly elected. On the stock exchanges, one looks above all to see whether the future president can also count on a majority in these two chambers of parliament. Although Trump currently has a slim majority in the Senate behind him (53 out of 100 MPs), the House of Representatives is dominated by the Democratic Party of Joe Biden.

The Swiss bank UBS currently sees a 50 percent probability that Biden will rule with a majority in the Senate and House of Representatives in the future. This scenario is - after the color of the Democrats - also called "Blue wave" designated. The reverse of one "Red wave", i.e. Trump remains US President and has a majority in both chambers of parliament, sees UBS only with a probability of 5 percent.

Historically, the markets have always performed best when the US president could count on such a majority. It is different if the president cannot count on a corresponding majority: Then more compromises are necessary and the politics of the largest economic power becomes more difficult. UBS sees a 10 percent chance that this could happen to Biden - and 35 percent that Trump will stay in office but not have a majority in parliament.

A real one Danger to the global economy or stock exchanges does not represent this, however. The “Neue Zürcher Zeitung” has already shown on the basis of Bloomberg data that almost all US presidents since 1933 have brought the most important US index (S & P500) rich profits: between an annual rate Plus of 8.8% (under John F. Kennedy, 1961-63) up to 17.4% (under Bill Clinton, 1993-2001).

There were only two exceptions: Under George W. Bush, during whose term of office the terrorist attacks of September 11, 2001 and the beginning of the financial crisis fell in 2009 (yield: -4.5% pa) and under Richard Nixon during the Vietnam War and the oil crisis (Return: -0.9% pa).

What does the result of the US election mean for investors?

For the Development on the worldwide stock exchanges is especially important how the companies develop - and how their future prospects are assessed. The US election should therefore not be that important. However, there may be some postponements depending on the outcome of the election. That's how they calculate Deutsche Bank analysts so that with an election victory Biden with “blue wave” in particular Emerging markets could benefit particularly strongly.

So if you invest around the world for the long term, you can relax and wait for the election decision in the USA. This is especially true if the investment is planned for several years or even decades - for example for your own retirement provision or asset accumulation. Anyone who relies on growney as a digital asset manager is actually extremely broadly positioned with a global market portfolio - up to 5,000 stocks from 45 countries are included.

So the portfolio is wide less of fluctuations due to the US election affected by the so-called “world index” MSCI World, for example, which is heavily weighted with US stocks - and has therefore already come under fire.

The head of asset management Fundamental Capital has already ruled: “The upcoming US election is actually not particularly important for investors”. His reasoning: “The stockbrokers have already prepared for it. Profits are secured, the portfolios are robust. The choice will not be a headache for you. "

Update on the situation here

Who will stand for election in the USA 2020?

On November 3, 2020, the incumbent US President Donald Trump for re-election on, in a team with his previous one Deputy Mike Pence. Both run for the Republicans.

Trump's challenger is Joe Bidenwho held the office of Vice President under former US President Barack Obama. He's running for the Democrats at his side is Kamala Harris Candidate for the office of Vice President.

In view of the old age of Trump (74) and Biden (77), the candidates for the office of Vice-President are of particular interest this time. They take over in US electoral system automatically, should the US president no longer be able to do so (or even die).

In addition to the election proposals Trump-Pence and Biden-Harris are also still three more pairs of candidates to choose from: from the libertarians, the independents and the greens. However, none of the three are given a great chance.

In addition, the completely re-elected complete House of Representatives (435 seats) as well around a third of the Senate (35 out of 100 seats).

How are the polls for the 2020 US election?

The polls on the US election are also viewed with suspicion. Because four years ago they foresaw a victory for Democrat Hillary Clinton against Donald Trump. As is well known, things turned out differently. The result of the election at the time: Clinton got the most votes, but Trump was able to win most of the electors - and thus became US President.

Current polls see Biden clearly ahead in favor of the voters: He is in some cases 10 percentage points ahead of Trump (52% to 42 percent). The decisive factor, however, is who gets a majority of 270 votes in the committee of 538 electors. And there is one here Trend for Biden, but far from a decision:

  • Joe Biden can safely count on 183 voters
  • for 96 others the following applies: tendency for Biden
  • Donald Trump is likely to have 72 voters for sure
  • with 53 voters: tendency for Trump
    (As of October 30, 2020)

The rest is still considered contested. These are mainly the so-called Swing stateswho opt for the Republicans (Trump's party) and the Democrats (Biden's party). In the 2020 US election, the states are the most important Iowa, Arizona, Texas, Georgia, Florida, North Carolina and Ohio than contested between the candidates.

US electoral system: how is a president elected in the US?

The president is only elected by the electoral body, the so-called electoral body, more than a month after the election date (November 3, 2020) Electoral College. The deadline for this is December 14, 2020. The electors do not meet for the entire USA, but meet in their respective states. All 50 states as well as the so-called “Federal District” Washington D.C. so participate in it.

They then vote on who will be US President and Vice President.

Who will vote for electors in America?

The electors are in each and every one of the 50 states of the USA as well as in the “Federal District” Washington D.C. elected. That is true Majority voting and usually that “Winner takes it all” principle. That means: The party that gets the majority of the votes in a federal state may provide all of the voters for that state.

The only exceptions to this principle are Nebraska and Maine: In these states, the votes are determined according to constituencies: The party that gains a majority in the constituency may send a delegate to the “Electoral College” for this constituency.

How many electors in a state depends on the size of the population - but it is at least three. California, the most populous US state, is allowed to send 55 delegates, Texas 38, Florida and New York 29 each.

Until when is Trump in office?

The inauguration of the new US President (“Inauguration day”) is January 20, 2021. If Trump loses the US election, he will remain in the White House as US President. Before the handover of office, the following dates are still pending in the US election:

  • December 8, 2020: By that day, the individual states must have determined their election results beyond any doubt
  • December 14, 2020: In the Electoral College, the body of electors, the US President and Vice President are elected
  • January 6, 2021: Senate and House of Representatives jointly review and approve the Electoral College election results.

If Trump emerges as the winner of the November 3, 2020 election, he would be four more years in office, so until January 20, 2025. Then he could not be re-elected under current law.