Bloomberg Market Live Pulse Survey
On the 5th of next month, in the US presidential election, it is forecasted that if the Republican candidate, former President Donald Trump, wins, stocks will rise relatively more, and the prices of gold and Bitcoin will increase significantly. If the Democratic candidate, Vice President Kamala Harris, enters the White House, interest rates are expected to decrease, leading to a greater decline in housing costs.
According to a survey conducted by Bloomberg Market Live Pulse from the 21st to the 25th, targeting 350 investors and economists, 38% of respondents predicted that if former President Trump wins, the S&P 500 index, centered on large-cap stocks, will sharply rise over the next year, exceeding the average monthly return of 2% seen so far this year. In contrast, only 13% of respondents believed that the S&P 500 index's growth rate would surpass this year's monthly average if Vice President Harris wins.
The proportion of respondents expecting the S&P 500 index to maintain its current growth rate was 21% if former President Trump wins and 32% if Vice President Harris wins.
This survey result reflects the expectation that corporate profits will increase further if former President Trump, who pursues pro-business policies such as corporate tax cuts and deregulation, is elected.
Amid growing uncertainty ahead of the US presidential election, the stock market has generally tended to rise more after elections. According to Bloomberg News, in the last eight elections, the S&P 500 index rose by an average of 1.5% in the six months before the election but increased by an average of 6.6% in the six months following the election.
Chris Larkin, Managing Director of Investment at Morgan Stanley Investment Management, diagnosed, "The S&P 500 index experienced selling pressure before the 2016 and 2020 elections but surged after the elections." Megan Horman, Chief Investment Officer (CIO) at Verdence Capital Advisors, said, "Market returns tend to be influenced more by economic fundamentals and corporate earnings than by who occupies the White House."
Housing costs are expected to decline if Vice President Harris wins. Respondents predicted that if Vice President Harris wins, the median 30-year fixed mortgage rate would fall from the current 6.54% to 5.5% four years later at the end of her term. Conversely, if former President Trump wins, the mortgage rate at the end of his term is estimated to be 5.9%. Former President Trump has pledged large-scale tariff impositions and tax cuts, policies that are expected to fuel inflation and high interest rates.
Gold and Bitcoin are expected to continue rising if former President Trump wins. Fifty-seven percent of respondents forecast that gold prices will increase if former President Trump is elected. The expectation is that if inflation rises under Trump’s presidency, gold, as an inflation hedge, will also rise. In contrast, only 45% of respondents believed gold prices would rise if Vice President Harris wins.
Cryptocurrencies, which former President Trump has shown a favorable stance toward, are also expected to rise if he wins. For Bitcoin, the median forecast predicts it will surpass $80,000 by the end of the year if Trump wins. Currently, Bitcoin is priced around $67,000. If Vice President Harris wins, Bitcoin prices are expected to fall to around $65,000 by year-end.
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