U.S. Election Stocks Favored by Inner Circles
As the US election approaches on November 5th and the Federal Reserve prepares to announce its next interest rate decision on November 7th, Wall Street professionals are carefully considering their investment strategies.
According to reports, the market is currently expecting a 0.25% interest rate cut from the Federal Reserve with a probability of 96%. This expectation has led investors to hedge their risks, as lower interest rates can affect borrowing costs and stock valuations.
One Wall Street insider, Sandra Navidi, founder of Beyond Global, has shared her insights on the financial industry's approach to the election. Navidi states that professionals on Wall Street generally favour Kamala Harris over Donald Trump due to the desire to maintain democratic structures and predictability. However, Navidi also notes that there are financiers, billionaires, and CEOs who support Trump or are hedging their bets.
In terms of specific stocks, Navidi believes that the financial industry will do well under Kamala Harris, but also under Trump due to deregulation. No new stocks or investments were revealed that the professionals are betting on, but key picks included Coinbase Global (a cryptocurrency exchange likely to benefit from Trump's crypto-friendly stance) and BigBear.ai (a defense-focused AI solutions company with growth potential).
To manage the broader economic uncertainty tied to the election, traders are also attentive to macroeconomic factors influencing market behavior. Emerging regulated election prediction markets, like Kalshi, may allow investors to hedge election-specific risk more directly through contract trading tied to election outcomes.
Navidi suggests that anyone who is investing long-term should probably ignore the week leading up to the US election and the Federal Reserve's interest rate decision, as the Fed is expected to try to remain non-political. Under a Trump presidency, fossil fuels would likely be more heavily supported, and prison stocks would benefit. However, Navidi notes that investors are covered on both sides, with investments in green technologies remaining a constant.
Overall, the financial industry's approach to the 2020 US election reflects a combination of sector-specific bets aligned with political policies and macro hedges to manage the broader economic uncertainty tied to the election. Investors are advised to stay informed and be prepared for potential market volatility in the coming weeks.
References:
- Coinbase Global (COIN) and the 2020 US Election
- Why BigBear.ai (BBAI) Stock is a Low-Price AI Defense Play with Strong Momentum and Volatility
- How the Federal Reserve's Interest Rate Decisions Affect the Market
- Kalshi: A New Era for Election Prediction Markets
- Sandra Navidi, a Wall Street insider, mentioned Coinbase Global as one of the stocks that the financial industry might invest in, given Trump's potential support for cryptocurrency.
- Navidi also suggested BigBear.ai, a defense-focused AI solutions company, as a key pick due to its growth potential and the industry's forecasted expansion under various political outcomes.
