Impact of Election Outcomes: What a Trump or Harris Win Means for Investors

Global markets had a mixed week, affected by concerns over geopolitical issues and changes to U.S. jobs data.

In October 2024, the U.S. added just 12,000 jobs, the smallest increase since 2020, after adding 254,000 jobs in September. The unemployment rate stayed at 4.1%, and average hourly pay went up by 4.0% from last year. This slow job growth was due to bad weather and strikes, especially at Boeing.

Euro was one of the best performers the previous week due to upbeat Eurozone economic data. In October, the Eurozone inflation rate was 1.7%, the lowest since April 2021, mainly due to falling energy prices. Preliminary GDP growth for Q3 2024 was 0.4%, with some countries growing, while Germany is expected to contract slightly. The unemployment rate stayed steady at 6.3%, down from 6.6% last year, indicating a strong job market. PMI data showed mixed results, with manufacturing struggling while the services sector is expanding.

US election result and Impact on US dollar-

Some analysts believe that Trump's policies could temporarily strengthen the dollar because of expected economic growth. However, others warn that ongoing uncertainty and possible trade conflicts might hurt confidence in the dollar over time. The key will be how fiscal spending and inflation affect the dollar's future value.

Market expectations indicate that if Kamala Harris becomes president, the Federal Reserve might keep lowering interest rates, especially if inflation stays low. Lower interest rates usually weaken the dollar because they lower returns on investments in dollars. However, if her policies boost economic growth without causing much inflation, it could help the dollar stay strong over time.

US election Result and Impact on Gold-

As of November 3, 2024, the U.S. presidential election is just a few days away, set for November 5. The race is very close between Democratic Vice President Kamala
Harris and former President Donald Trump. More than 75 million people have voted early, showing strong interest in the election. Both candidates are concentrating their efforts in important states like Michigan, Pennsylvania, North Carolina, and Georgia, where the polls indicate a tight competition.

By late October 2024, gold prices rose to a record high of $2,771 per ounce. Analysts say a Trump win could cause gold prices to keep rising because of worries about inflation from his planned tariffs, especially a 60% tax on Chinese goods. This situation might lead more people to buy gold as a safe investment against rising prices and economic issues.

If Kamala Harris wins and her government is seen as stable and effective, it could lower the demand for gold, which people usually buy during uncertain times. Analysts think she may keep interest rates low to help the economy, which usually supports gold prices. However, if a strong economy leads to a stronger dollar, gold might become less attractive to investors.

The Standing Committee of the National People's Congress (NPCSC) will meet from November 4 to 8, 2024, and this meeting could greatly affect China's economy and investor confidence. It is especially important because it happens during the U.S. presidential election week and amid challenging economic times for China.

FOMC monetary Policy-

The Federal Open Market Committee (FOMC) will meet on November 6-7, 2024. This comes after their last meeting on September 17-18, 2024, where they made important decisions about money policy. Analysts expect a 0.25% cut, which would lower the federal funds rate to 4.50% from the current rate of 4.75% to 5.00%.