Why is the stock market with stars and stripes experiencing significant increases?

The main media covering the presidential elections in the US have so far essentially talked about a head to head.

Of a situation of almost breakeven, and therefore this bullish flare up of the overseas stock markets might seem strange.

Above all in consideration of the fact that the stock market, usually, does not like situations of uncertainty, rather it hates them.

Why, therefore, is the stock market with stars and stripes experiencing significant increases?

In reality, many situations are relative, and often different elements must be considered in the context of reference.

This principle, applied to the US elections, means, in essence, that it is true that the result tends to uncertainty for the moment. But this element is not to be considered in absolute terms.

Before the vote counting began, almost all pollsters had announced a situation of clear advantage for Biden.

There was talk of a blue wave in favor of the Democrats.

Modestly, I had said that I absolutely disagreed with such projections, based on a method based on Google Trends.

And, in fact, this blue wave was not seen, quite the contrary.

On the other hand, it should not be forgotten that Trump won in Ohio, a state which, in a significant number of times, indicated that he would later turn out to be President.

But why are the US stock exchanges celebrating?

In yesterday's article we saw how Google Trends indicated a result that was anything but favorable to the so-called blue wave.

The realization of this scenario was decisive, in my opinion, for the sudden surge in US prices.

Indeed, we had already examined the preferences of the markets between the two candidates.

Markets that, evidently, have confirmed them for Trump.

The challenger Biden, for his part, certainly is not a harbinger of topics that are pleasing to most investors, when he refers to an electoral program focused on possible increases in the tax burden or on a redistribution of income in a socialist sense.

The basis of an electoral program, in economic matters, very different from that of Trump, already implemented in the direction, instead, of reducing the tax burden.

Let us not forget that such an economic policy was one of the main elements, which allowed both forms of share buy back and the increase in corporate profits.

The hikes started before election day, and could therefore be assumed to be betting on Biden.

However, the spread of forecasts, such as those based on Google Trends, a research tool used to a significant extent also by US analysts, as an alternative to classic electoral polls, explains the reason for a stock comeback in view of a renewed election of the President. in charge.

Future election results

Having therefore clarified the main reason, if not the only or almost the only one, for the increases of these sessions on the US lists, which aimed at a Trump victory, let's take a look at the future possible scenarios at the electoral level.

Having acquired a series of data, which yesterday, while I was writing my article, were still unconfirmed, we can say the following.

We can identify at least three particularly relevant elements.

Google Trends, Ohio voting and current number of top voters.

At least two out of three would indicate Trump's final victory.

Google Trends because predictor of probable results, through data relating to the number of searches on Trump and Biden. The vote in Ohio because in almost all cases whoever wins in this state becomes President.

The number of large voters, for its part, is favorable to Biden, but in any case not to the extent projected by many pollsters. And it still remains to count the great voters of various states.

Overall, the whole could then be complicated by legal appeals and counter-claims by the two candidates.

Therefore, at present, a scenario of substantial uncertainty remains, but with a majority of predictors in Trump's favor. Although Biden is in the lead in the number of large voters already assigned.

In conclusion, if anyone wonders why the Stars and Stripes Stock Exchange is experiencing sessions of marked rise, it must be said that the party could end, if a phase of uncertainty continues, such as that based on the protracted legal disputes.

Curated by Gian Piero Turletti, author of “Magic Box" is "PLT"

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