Since early October, market trends have shown a strong expectation of a Republican win in the upcoming U.S. elections, specifically anticipating Donald Trump’s victory along with Republican control of both houses of Congress. This assumption of a Republican sweep has led to a rise in U.S. stocks, the dollar, and bond yields, driven by the belief that a Republican administration would enact inflationary, pro-growth policies like tax cuts, increased deficit spending, and deregulation. However, current polling shows the Republican lead is within typical margins of error, suggesting that the market’s confidence may be premature. If this anticipated GOP sweep does not materialize, significant market shifts are likely.
1. Scenarios for Post-Election Market Impact:
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