U.S. investment bank JPMorgan expects the S&P500 index to surge 12.6% to 3,900 points if the re-election of U.S. President Donald Trump occurs next week, calling such an outcome the most favorable for stock markets. JPM said in a note to clients on Monday, “We see an ‘orderly’ Trump victory as the most favorable outcome for equities.”
JPMorgan said several of its data gatherings, such as voter registration, Twitter sentiment, point to a “tightening race”. The bank sees a gridlock in the election as a “net positive” for stocks. The odds of a “blue wave” have narrowed slightly since mid-October.
Within sectors, JPM sees beaten down energy and financial stocks to likely be key beneficiaries of a Trump victory, while a Biden win could trigger a rotation from U.S. growth stocks to non-U.S. growth stocks, given the risk of higher taxes.
“We find that energy, financials and healthcare sectors could likely see the most outsized moves as they have been explicitly referenced by each candidate on the campaign trail,” the bank added.
MacDailyNews Note: In the U.S., Election Day 2020 is Tuesday, November 3rd. More info about U.S. Voting and Elections: https://www.usa.gov/voting