What Is the State of the Stock Market Now and Into 2021?
Every investor knows that the state of the stock market can change on command virtually overnight for a variety of different factors. Some of these factors are simple, like new tech releases or a boom in jobs. Other factors are not so simple. In 2021, there is the possibility of a new president and with that comes more possible changes in the stock market. Everyone is asking whether or not this new president will impact the stock market with the choices he makes. The answer to this question could be harder to solve than most people think. Stock price targets could go up or down, but there are some possibilities that investors should know about.
Will a new president impact the stock market?
Historically, new presidents haven’t impacted the stock market in a good or bad way too much at all. Actually, the president himself doesn’t have too much impact on the market. It is more like their actions have a huge impact. In the run up to an election, the markets will look towards the candidates to deliver a vision of a possible future. Influenced by the social and economy climate at the time, the stock market will factor in various elements and more often than not usually makes a good prediction of who the winning candidate will be. As the markets have already factored in the change, the transition of power from one person to another won’t hurt or help the stock market.
It could see a slight change, but nothing that will call for an investor to make a decision of buying or selling stocks. Actually, in previous years, the changing of the presidency has kept the stock market exactly the same as it is with no increase or decrease at all. What will change the stock market will the policies and decisions the new president makes.
What are some possible policies and decisions?
If you keep up with any tech news data source, you know that some of the decisions the president makes could force the market to go up or down quickly. One decision is about climate change. If the president makes a decision to stop climate change, it’ll take money away from the economy that was allocated for something else. This could cause the market to rise or fall depending on how it impacts the world. Another thing that could impact the market is if or when the president actually says a vaccine to end the pandemic will be ready. When this is announced, it could cause the market to rise as well as any companies’ stocks that have a hand in the vaccine and its production. This is more than just healthcare companies. These are companies that transport the vaccine and produce the containers for the vaccine. Since it will be in such high demand, all of these companies’ stock prices will rise.
What kind of presidency has been best in the past for the stock market?
Neither side has really been much better than the other when it comes to the performance of the stock market. Political parties have a small percentage difference in stock market success, but one factor has remained true. A mixed House and presidency have caused the stock market to soar in the past. This means the political party affiliation of the House is different from the presidency. For some reason, when this happens the stock market tends to take off and destroy if one party controls both the House and presidency positions. If you’re an investor, you might be rooting for a mixed House and presidency combo. In the past, it has resulted in a 17% return of the market compared to one-sided control of the House and presidency which has only resulted in a 12-13% return in the past. Once again, the actual presidential candidate has little to do with how the stock market is performing here, but the mix of control has a lot to do with the climbing market.
What else can you expect from a new president and the stock market?
It’s hard to tell exactly what might happen when comparing a new presidency and a stock market outcome. Many major news sources like The New York Times have reported that when a new president was announced, the stock market skyrocketed. However, the 90% effective vaccine for the virus that caused the pandemic was announced the very next day and this could have been the cause for the sudden, big rise. It’s hard to tell exactly how a new president could impact the market, but it could easily have very little impact on it or a lot of impact.