Anything other than a Trump win ‘could see this trade suffer some’ Per Investing.com
Investing.com — Barclays analysts suggested in a note on Friday that while markets are pricing in a Trump victory, uncertainty remains high due to closed poll results.
According to Barclays, “the betting odds continue to favor Trump’s victory,” but as the polls show a close match, market participants are facing potential scrutiny.
“The current market may be at risk of going up and down if the outcome looks like betting odds, and it’s like polling,” analysts said, pointing to possible volatility if Trump fails to get a decisive decision. victory.
Despite recent earnings volatility and mixed economic data, Barclays notes that the pro-cyclical cycle continues, fueled by unexpected rebounds in economic indicators.
However, the bank highlights that “increasing prices due to financial instability” is reducing trade, especially as financial uncertainty spreads.
European markets, which have struggled to catch up with the US, may be more sensitive to the election results, Barclays said.
In the event of Trump’s loss, Barclays suggests that Europe may have a smaller upside, especially in trade-sensitive stocks, where the bank believes “there is more potential downside than pricing.”
Even if Trump wins, analysts speculate that European markets could see gains from a potential de-escalation of the conflict in Ukraine.
Overall, Barclays warns that anything less than a solid Trump victory “could see these trades experience some volatility, or reversal, after the election,” as markets readjust based on official results.
