Tag: election2020

Finance

Investors ‘freaking’ over possible contested outcome of U.S. election: poll

Author ByCFI.co Blogger

A disputed result in November’s U.S. presidential election is now the number one concern for investors – even ahead of a second wave of Covid-19 – according to a new global survey.

The poll carried out by deVere Group, one of the world’s largest independent financial advisory and fintech organizations, asked more than 700 clients ‘What is your biggest investment worry for the rest of 2020?’

A contested U.S. election was the number one (72%); the impact of a Covid-19 second wave (18%) and U.S.-China trade war (5%). The remaining 5% was made up of other geopolitical issues, including Brexit.  

735 people resident in the UK, North America, Europe, Asia, Africa, Latin America and Australasia took part in the poll.

Of the poll’s findings, deVere Group CEO and founder, Nigel Green says: “Investors around the world are beginning to freak about the U.S. presidential election. 

“But not about whether Trump or Biden wins, rather over the looming possibility of a disputed outcome.

“President Trump is already questioning the legitimacy of the election, heightening the chances of a contested result and an ensuing constitutional crisis in the world’s largest economy.

“It’s getting ugly and investors are, rightly, concerned that this will generate massive waves of volatility in the markets, not only in the U.S., but around the world.”

He continues: “Investors are telling us this is their biggest investment worry for the rest of 2020.

“It is likely that any election-triggered volatility will be highly impactful for may be only two or three weeks.

“As always, investors should remain in the market during this time.”

Rational investors, Mr Green believes, should be capitalising on any election turbulence.
 
“There are two key reasons why investors should be building up their portfolios in volatile times.
 
“First, are long-term benefits. There are many unknowns, but what we do know is that over the longer-term the performance of stock markets is fairly predictable: they go up.
 
“Indeed, for this reason, over a longer time horizon, investing in equities is almost universally recognised as one of the best ways people can accumulate wealth.
 
“By not topping up and diversifying portfolios in volatile periods, investors are pushing back the longer-term benefits they could be starting to reap.  Why forsake the long-term gains that would be generated on money invested now?”
 
“Second, the buying opportunities.  The see-sawing markets are a chance for investors to put new money into markets at lower prices.  A slump in the market means that there are high-quality equities available at more attractive prices.”

The deVere CEO concludes: “A contested outcome of the U.S. presidential election will almost inevitably send the stock markets into a temporary tailspin – and this is weighing on investors’ minds.

“I would argue, they should try and use the volatility to their financial advantage where possible and appropriate.”

Economics

Why Biden or Trump must urgently secure stable relations with China

Author ByCFI.co Blogger

Joe Biden or Donald Trump – whoever is the President of the United States come November, their ultimate challenge is to secure “stable relations” with China which would win an all-out trade war, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as Mr Biden prepares to give his official acceptance speech on Thursday night to the Democratic National Convention to become the party’s nominee to run against Mr Trump on November 3.

Mr Green says: “Managing China and maintaining America’s fragile economic superiority over its major trade and commerce rival will be the defining foreign policy issue of this presidential election.

“Both the Democratic and the Republican candidates seemingly share a belief that ‘being tough’ on China — or whoever can knock China the most effectively– is going to do well with the electorate.

“Both Biden and Trump will up the China-bashing between now and November 3.”

He continues: “Whilst this strategy might be a political weapon to win the White House, whoever does become the next CEO of the world’s largest economy will have a golden opportunity to secure stable, normalised relations with China.

“And this should be high-up on their agenda.

“Cooperation will benefit both nations by helping to boost global economic growth, encourage investment, secure jobs, keep prices down for consumers, reduce unfair or illegal economic, commercial and technological practices, reduce poverty and environmental problems, and contribute to stopping human-rights abuses and military interventions.”

But there is another major reason, says the deVere CEO, why moving towards amicable relations with China cannot go unmet by the incumbent or the challenger.

“A de-escalation in U.S.-China tensions must be a top priority for whoever is in the Oval Office because it can be very reasonably assumed that China will win an all-out trade war.

“Why? Because America’s trade deficit with China is frequently over-estimated and barely gives it the upper hand.

“Also, China’s central bank — unlike the U.S. Federal Reserve — is not independent and can be made to cut interest rates to bolster domestic demand and devalue the currency to make Chinese exports even more competitive.

“In addition, China is better positioned than America – which has a record budget deficit – to help out industries hit hard by a trade war. 

“Plus, the ruling Communist Party of China can take the political impact of a trade war better than whichever party wins in the U.S. 

“The leaders of China don’t need to play popularity games.”

Mr Green concludes: “Whoever wins the U.S. presidential election must seize the momentum that a win gives a political leader and immediately seek amiable relations with the world’s second-largest economy.”

Economics

Markets DISMISS Trump impeachment – but monitor China trade relations and Coronavirus

Author ByCFI.co Blogger

The bullish financial markets are indifferent to the Trump impeachment trial – more concerning is the U.S.-China trade deal and the Coronavirus, says the CEO of one of the world’s largest independent financial services and advisory organisations.

The comments from deVere Group chief executive, Nigel Green, come as U.S. President Donald Trump’s historic impeachment trial got underway on Tuesday in the Senate, with Democrats calling for his removal from office and Republicans determined to have him acquitted.

Mr Green says: “A major geopolitical event such as the impeachment trial of a U.S. President would, typically, send shock waves through financial markets.

“This has not been the case here. The seemingly relentlessly bullish markets have largely shown indifference to the impeachment process. 

“This is because investors see the likelihood of Trump being removed from the White House following a Senate trial as almost zero.”

He continues: “However, what is far more likely to cause market jitters in the coming weeks are vulnerable trade relations between the U.S. and China, the world’s two largest economies.

“U.S.-China phase one deal has stopped additional tariffs being imposed on each other’s goods.  However, it does not address serious structural issues of trade between two vastly different economies, one which has enormous state capacity. In addition, the sheer number of goods – amounting to $200bn –that China will need to buy from the U.S. could, ultimately, make the deal unworkable.

“The hard part is negotiations yet to come.”

Mr Green goes on to add: “Markets will also be weighing concerns regarding the spread of the Coronavirus that has afflicted hundreds in China so far – as hundreds of millions prepare to travel during the Lunar New Year period. It’s the largest annual human migration on Earth.

“The World Health Organisation is meeting on Wednesday to discuss the situation.  An upscaling of the threat could depress markets and hit consumer sentiment and spending.”

The deVere CEO concludes: “This bull market isn’t bothered about Trump’s impeachment trial. It will be closely monitoring other major issues, including the U.S.-China trade dispute – the far-reaching impact of which is likely to outlive Trump’s presidency.”

Politics

Trade War: China wants Trump re-elected in 2020 for its economic agenda – here’s why

Author ByCFI.co Blogger

November 8 2019

China wants Trump re-elected in 2020 to achieve medium-term and long-term economic objectives, affirms the CEO of one of the world’s largest independent financial advisory organizations.

The comments from Nigel Green, chief executive of deVere Group, come after China fuelled hopes that a deal can be reached to end its trade war with the U.S. after agreeing with Washington to roll back on some tariffs.

The deal to reduce trade tensions could encourage the International Monetary Fund (IMF) to revise up global growth forecasts next year.

Mr Green notes: “There has been an argument that in regard to the trade war, China was holding out, playing the long game and waiting for President Trump to leave office, before dealing with another administration.

“Whilst this argument might have held water before, I now believe this is not the case – and it is what is fueling recent developments in the trade war negotiations.”

He continues: “It is likely that China is currently fueling hopes to reach a phased agreement in the trade dispute with the U.S. and cancel tariffs as soon as possible because it will help President Trump’s re-election.

“His re-election would suit them for two major reasons.

“First, because they will assume that reaching a deal with Trump to end the damaging trade war will probably be easier than with some others. These include Elizabeth Warren, the potential Democratic rival, who could, say many supporters, win next year’s presidential election.  

“Ms Warren can be expected to be even tougher with China than Trump, and not only on trade, but on other difficult issues, including climate change and human and labor rights.

“And second, despite the trade war, Trump’s policies and rhetoric have proven to be strategically helpful to China in achieving its longer-term goals.  

“In many respects, President Trump has undermined Washington’s global credibility, international governance bodies and key alliances, and has been indifferent if not antagonistic towards major trading agreements.

“This all compromises America’s standing as the world’s primary superpower and it provides China with openings and opportunities it has previously never had in terms of global influence and setting international trade conventions.” 

The deVere CEO concludes: “The positive signs coming from Beijing and Washington on the trade talks between the world’s two largest economies have been welcomed by stock markets – some reaching all-time highs this week.

“Investors’ exuberance will grow further still should the deal be cemented, and also should Trump be re-elected.

“However, U.S. investors should perhaps also question whether Mr Trump’s administration has, in fact, handed China a great strategic opportunity that could damage America’s preeminent superpower status in the longer-term and, therefore, its economic dominance.”