FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.
The US election on 5 November 5 is definitely top of mind. So it is unsurprising that Goldman Sachs’ latest Top of Mind report focuses on post-election economic policies. Alec Phillips, chief US political economist in Goldman Sachs Research, said in the report that financial regulation could change in a second Trump administration, with potentially faster shifts across consumer finance than in the case of capital and liquidity requirements.
Under a second Trump administration, Goldman Sachs also expects an easier regulatory climate for several sectors including energy, antitrust enforcement and healthcare.
“That said, while reduced regulation could in principle boost economic activity, our prior bottom-up work in this area suggests that deregulation during the first Trump Administration had a limited macroeconomic impact,” added Phillips.
The bank also looked at the possible impact on asset classes including equites:
At Northern Trust, Grant Johnsey, regional head of client solutions for capital markets found there are seven instances in which the S&P 500 returned over 20% in a calendar year before a presidential election year. In those seven instances, the S&P 500 closed higher in the subsequent election year. Therefore, unless there is a dramatic sell-off in the last two months of this year, 2024 should be the eighth instance where the S&P 500 closes higher in an election year following a 20%+ gain in the previous year.
Jim Toes, president and chief executive of STA, said in a newsletter that things to keep in mind as the election approaches include buy hope, sell fear; the need to educate yourself and vote and to be gracious.
He stressed that the STA is bipartisan: “No matter what the political landscape may look like on January 20, 2025, STA’s mission will remain the same. We are here to represent the securities industry and the interests of you, our members.”
His final piece of advice:
“Meteorologists worldwide are in agreement that the sun will rise on Wednesday, Nov. 6. We may not know who the next president will be on that day, but we will eventually. And life will go on.”
In a similar vein, writer Oliver Burkeman gave some advice on how not to freak about the US election.
Burkerman said: “For years now, since long before I started writing books, I’ve found solace and breathing-space in a question from Eckhart Tolle: “Do you have a problem now?” “Narrow your life down to this moment,” Tolle writes. “Your life situation may be full of problems – most life situations are – but find out if you have any problem at this moment. Not tomorrow or in ten minutes, but now.”
This was backed up by the Daily Stoic website which quoted Marcus Aurelius’ Meditations:
“You must build up your life action by action, and be content if each one achieves its goal as far as possible—and no one can keep you from this.”
The Daily Stoic added: “Being virtuous, like voting, is within our power. Whether it visibly changes the world is not. But we act because it is our duty, and that alone is reason enough. The same applies to voting—in this election, in the next election, in every election. Make your small contribution to the common good, because even if it doesn’t reshape society, it shapes you.”
