New York Trading Day opens with a jump of more than 2% in all indices • After elections there is usually a period of euphoria in the capital markets • Trading in Tel Aviv closes with increases of about half a percent • Estimates: Biden's choice will lead to sharp price declines in the short term
After Tel Aviv closed with slight price increases of about half a percent in the leading indices, New York opened trading with a jump in all indices of more than 2%.
The big US banks have estimated that this is not a response to the election, but rather an election. Before the election there is a period of uncertainty, but as they get closer this period ends. After an election there is usually a period of euphoria in the capital markets.
Photo: Reuters
Markets further estimate that Joe Biden's selection will lead to sharp declines in the short term, until it becomes clear how much he intends to implement the plans he has announced.
Biden has promised larger, regional aid packages - which is understood by investors as a less efficient and wasteful direction.
It also intends to raise taxes - another fact that detracts from market optimism.
There is also significance to the size of the election, analysts say: the extent to which the winning party will control the House of Representatives and the Senate.
If Biden wins, but not sweepingly, the win will result in a different outcome from his sweeping win, which also guarantees the ability to implement the economic policies he has promised.
In contrast, President Donald Trump intends to deliver a small immediate aid package slightly less than Democrats' demands, but more effective - by personal rather than regional criteria.
He also declared a continuation of the war on bureaucracy for businesses and the subsequent reduction of taxes - two measures that support companies.
His conflict with the giant Facebook and Twitter companies causes many to attribute a negative reaction of the entire high-tech market to Trump, but in fact he is the one who responded to many companies in the US, after the Obama era and his policies to support the industry, besides the spot conflict Ethically businesslike.
Photo: Reuters
GPS Morgan claims that the S & P500 index has the potential to jump 54% from its current rate in the near term.
As mentioned, the markets prefer the incumbent president, if only because of the certainty created after the market understood its way.
According to their predictions, this fact gives priority to the election of Trump - from the very fact that his election conveys stability.
In Biden's case, the market has something to fear: its policies could create unemployment and hurt the growth rate that Trump is fighting to produce.
All these assessments should be qualified by the fact that the connection between the economy and the fiscal policy of the White House should be looser than this connection in European countries, and certainly in Israel.
This is the essence of the free economy - the weakening of the relationship between government and markets.