Has “What If Tiger” started? Turn the US presidential election into an investment opportunity! June to August deserve attention

The first half of the S&P 500about 15%The rate of increase was recorded, and it achieved the 21st best performance in the first half of the year after 1900. The focus of the market was definitely on the period when NVIDIA, AI, and the Fed cut interest rates,The shift to the US presidential election has now begun. 2024, which enters the fourth year of the presidential election cycle, is for the US stock marketIt's a very important year. What will happen to US stocks entering the “election year”? And when the US Federal Reserve cuts interest rates in the presidential election year, the US stock market1+1＞2 bull marketCan it be achieved? These are issues that many investors are concerned about.

According to data dating back to 1928, the fourth year of the presidential term is for the US stock marketsecondIt's been a strong year (the first is the 3rd year of the presidential term). What is the background of strong performance in the fourth year of the presidential election cycleIn order to increase the possibility of re-election, the current president will finally try to stimulate the economy through fiscal spendingThere is a way of looking at it.

According to the BofA survey, if you look at the average monthly return of the S&P 500 in the 4th year of the presidential election cycle, January to May were dull,Summer rally from June to August、September-October was the slump before the election、Is November to December a backlash after the electionIt is said that it has become In other words, US stocksThe highest value will be updated again in the next 2 monthsIt is expected that will happen.

In the meantime,The strongest month of the year is AugustSo, averageJust over 3%the rise of,71% win rateRecord it. Meanwhile, it dispelled the sense of uncertainty about the presidential electionDecember had the highest win rate, reaching 83%。

Goldman Sachs analyst Oscar Ostlund said that the Goldman Sachs options market usually starts pricing about 3 months before the election, and said, “We haven't reached that stage yet,Market volatility will soon riseIt is anticipated, and the market should pay close attention to the potential impact of the election on the stock market.”

The S&P 500 index has not recorded a decline of 2% or more for close to 400 days, but since election risks have already begun to spread to financial markets,this situation may soon change. Goldman Sachs said that even if either the Republican Party or the Democratic Party wins, the US government will increase the degree of freedom to spend in the administrative sector,Negative for the bond marketI'm analyzing it when it becomes. Institutional investors also think that if Mr. Trump wins, it could mean that the Federal Reserve (Fed) will adopt a more dovish policy, even if the House of Representatives splits or becomes a unified administration,Will it be advantageous for US stocksThe market thinks so.

Goldman Sachs analyzed how institutional investors viewed the November election results.
・US stocksIn contrast,Trump's and Republican victories are most favorableAnd the victory of Biden and the Democratic Party is negative.
・US Treasury Yieldare most of the 4 scenarios (“big victory for the Republican Party”, “big victory for the Democratic Party”, “split of the Trump administration”, “split of the Biden administration”)upward trendThere is,US bonds continue to be soldIt means there is a risk. Among these,U.S. Bondsagainst,Continued stalemate between the two major political parties is most advantageousAlso, since both parties tend to expand their deficits, even if either party wins big, it is disadvantageous for US debt.
・dollarsIn contrast,The victory of the Republican Party is more favorableIt is said that it is.

UBS analysts analyzed the policies of the past two US presidents and how they affected specific sectors and companies, and compiled a list of “stocks related to Biden's re-election” and “stocks related to Trump's victory.” Check out the list of industries and stocks that are likely to benefit from the election results!

However, last week, the first US presidential election debate ended, and Biden's performance was disappointing. The success or failure of one debate does not affect the final result,Expectations for “Trump's return” continue to grow. Currently, market predictions about the possibility that Biden will win the 2024 presidential electionIt fell to the lowest levelWhat are Trump's chances of winningHas risen to the highest level. According to Real Clear Politics, there is a possibility that Biden will be re-elected in November19%It is.

According to Bernstein, crypto assets are in the US presidential election season this year,Possibility of emerging as a major “Trump trade”It is said that there is. According to the report, the Republican Party sees a favorable stance against the crypto asset industry as a way to acquire voters and obtain campaign funds from a super PAC (political activity committee) that supports politicians who promote crypto assets.

Conventional Trump trade comes from the fact that US stocks, government bond yields, and dollars increased rapidly at the same time after Mr. Trump won the 2016 presidential election. If Trump wins this time,Adoption by institutional investors and improvements in the regulatory environment will boost the rise in crypto assetsSeemably.

Even if you look at the reaction of financial markets, this seems to be confirmed. After the first debate in the US election, Mr. Trump's approval rating took the lead, and Bitcoin began to rebound,At one point it exceeded the $63,000 mark。

As described above, if Mr. Trump wins, there is a possibility that health insurance companies, virtual currency-related stocks, etc. will rise.

In fact,In addition to the fact that expectations for “Trump's return” continue to rise, expectations for interest rate cuts are also getting stronger. Market participants believe that the biotechnology sector underperformed the market in the past 3 years, but if the Fed cuts interest rates, the biotechnology sector represented by innovative pharmaceuticals will turn upward. This is because biomedical science and technology research and development cycles are long, and large investments, high costs, and initial stages are heavily dependent on external capital injections. When US bond yields are high, that is, when returns on low-risk investments are high, funds are unlikely to take greater risks and invest in innovative pharmaceuticals or other research and development with heavy equity assets.