The upcoming election is already shaking up the markets(Exlusive charts you need to see). This election is about much more than politics—it’s about major potential market shifts. So, what could this mean for you? We’ve taken a deep look into three key areas: Volatility, Trend, and Asset Targets. Whether you’re a seasoned Trader or just getting started, this analysis will help you make the most of market shifts around the election.
Let’s break down how a Trump or Harris win could impact your investments—and why this might be the chance to act. You have access to this analysis, go ahead and read what’s ahead.
1. Volatility: Trump Win Brings Big Swings, Harris Brings Stability
Why This Matters: A Trump win could bring extreme volatility, with fast, strong moves across stocks, bonds, and the dollar. But what exactly is volatility? In simple terms, it’s how much an asset’s price changes over time. High volatility usually means bigger swings in price. That can mean bigger profits—but also more risk.
What to Watch:
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Bond Yields Spike: When demand for bonds drops, yields (returns on bonds) go up. A Trump win would likely lead to higher government spending, which could push yields higher as bond prices drop.
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Russell 2000 Boosts: This index measures U.S. small-cap companies. Trump’s economic approach favors these firms, so the Russell 2000 could see big gains if he wins.
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Strong Dollar (USD): In times of uncertainty, many investors buy the U.S. dollar as a safe option. A Trump win could push the dollar higher, as investors look for safety.
In Summary: With a Trump win, volatility spikes across the board. This could be an opportunity for those ready to act fast. In contrast, if Harris wins, we may see more stability and slower market shifts (See Charts bottom of this article).
2. Trend: Harris Win Drives Bond Rally and Foreign Investments
Why This Trend Matters: While Trump’s win could create market “spikes,” a Harris win may lead to a long-term trend that benefits bonds and shifts money overseas. A trend in the market refers to a steady, ongoing move in a certain direction. Trends are often more predictable and less risky than high-volatility trades.
Key Trend Indicators:
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Bond Rally: Bonds are a safe choice, especially when rates fall. A Harris win would likely lead to lower interest rates, causing bond prices to rise and yields to fall, as people buy up bonds for security.
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High-Beta Assets Abroad: High-beta assets move more than the market average. Lower U.S. rates could push money abroad, where returns are higher. Harris’s expected rate cuts may create more interest in these high-yield foreign assets.
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Smart Money’s Move Away from U.S. Markets: Hedge funds and major analysts (also called “smart money”) are leaning toward a Harris win. Their strategy likely includes shifting U.S. investments into international markets, following the trend of lower rates in the U.S.
Takeaway: Unlike Trump’s sudden moves, Harris’s policies could set up a steady trend, favoring bonds and foreign markets for stable, longer-term opportunities.
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3. Asset Targets: Key Moves in Bonds, Dollar, and Global Rates
Why These Targets Matter: Some assets may react faster and stronger to the election outcome. Knowing which to watch could give you a clear advantage in the market.
What to Focus On:
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10-Year U.S. Treasury Yields: Treasury yields indicate Traders confidence in the U.S. A Trump win might keep yields below 4.6%, while a Harris win could bring them closer to 4.2%. This would mean bond prices rise under Harris as investors seek a safer return.
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U.S. Dollar Index (DXY): This index shows how the dollar is performing against other major currencies. If Trump wins, expect DXY to rise, possibly reaching 107-108, showing a stronger dollar. A Harris win, however, could lower it to 104 or even the 90s if rates drop, signaling a weaker dollar.
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Bund-Bond Spread: The spread, or difference, between U.S. and German bond yields, signals the appeal of each economy. With German bond yields stable, any change in this spread will likely come from U.S. yields. A Harris win would lower U.S. yields and narrow the spread, pushing investors to look internationally.
Bottom Line: For short-term gains, volatility from a Trump win may be ideal. But for more stable returns, Harris offers long-term trends.
Do You want Access to more Currency analysis, Gold, Silver, Oil, Wheat, Crypto, Alts and major indices, with targets and Trade Setups? Consider signing up for Speculators Trading Membership.
Bonus: TIPS/IEF Ratio and Inflation Clues
One final tool to watch is the TIPS/IEF ratio. TIPS (Treasury Inflation-Protected Securities) protect against inflation, while IEF (iShares 7-10 Year Treasury Bond ETF) measures the bond market. This ratio can indicate where inflation is heading, and a Harris win would likely drive it lower, signaling lower inflation expectations and stronger bonds.
The Final Takeaway:
This election may set the stage for either short-term gains with a Trump win or long-term growth with a Harris win. Now is the time to understand the trends and make your plan.
Understanding these election-driven moves could help you find big opportunities—no matter the result. With information based trading and more confidence.
The Yield Spread between Germany and US are key leading indicator for major USD pairs and especially EURUSD.
The US 10 year yields, is a key leading indicator for USDJPY and most of the Yen crosses. It also gives us and understanding where Gold and Indices are headed.
Do You want Access to more Currency analysis, Gold, Silver, Oil, Wheat, Crypto, Alts and major indices, with targets and Trade Setups? Consider signing up for Speculators Trading Membership.