财经政策 · 2

What is the impact of the new US financial policies and regulatory trends on the US stock market?

“The US is expected to have many new financial policies and introduce a large number of new regulatory regulations this year. What is the impact of these policies on the US stock market? The author hopes to use this article to give you some analysis and predictions.” 1. Regulatory Trends The new President Joe Biden and Trump are headed by Senator Kaufman of Delaware, a Democrat who places great emphasis on regulation. The proposed Treasury Secretary, Ms. Yellen, is also an Obama-era veteran who promoted the last round of regulation of Wall Street. The proposed chairman of the Securities Regulatory Commission, Gensler, is also a veteran who emphasizes the supervision of the securities industry. It can be said that the Biden team's tax increases and regulations on US companies should be promoted simultaneously. The expansion of regulation can be predicted from the following aspects: financial regulation, technology regulation, and environmental supervision. From a financial perspective, the regulatory themes of Wall Street during Trump's term were biased towards deregulation, including mergers and acquisitions, proprietary transactions, cryptocurrencies, etc. After the Democratic Party comes to power, it should reverse this trend and strengthen supervision instead. Ms. Yellen has always advocated regulation. On her last day as Chairman of the Federal Reserve, she also signed a document to force Wells Fargo to restructure its board of directors. She also published an open letter two years ago along with other senior finance officials from the opposition Democratic Party calling for strengthened supervision of large financial institutions. Therefore, after the Democratic Party came to power, it is expected that large financial institutions will be required to split their business, systemically important insurance companies will be re-included in supervision, and that the cryptocurrency industry will be required to strengthen compliance. Looking at technology companies, in addition to raising taxes on technology companies, Biden's team will also file antitrust claims. Currently, there are 5 social platforms with more than 1 billion users around the world, 4 of which are owned by Facebook. At least two of these four families should be asked to split up. However, Amazon's monopoly on cloud computing, e-commerce, logistics, etc. will eventually be resolved through a spin-off listing. Whether social media should be regulated according to the media is also an issue that the Biden team needs to address urgently. In addition to pressure from within the US, there is also pressure from the European Union to regulate these technology companies. It can be said that the time has come when they have to be introduced. Regulations on environmental protection were extremely relaxed in the Trump era, and will inevitably be reversed in the Biden era. For example, restrictions on carbon emissions, and the re-tightening of oil and gas extraction in the Arctic region, the Pacific coast, the Dakota region, etc., pollution enforcement against enterprises will all be strengthened. 2. Monetary policy monetary policy is probably the only thing that will not change much in US financial policy at present. First, due to the independence of the Federal Reserve, neither Biden's White House team nor Congress can directly change US monetary policy. Federal Reserve Chairman Powell's term of office is still two years away. It is difficult for structural changes in monetary policy to occur until his term ends. The other two vice presidents of the Federal Reserve Board, with the exception of one of the three members, are Republicans appointed by Trump; the only Democrat is Director Brainard. She used to be a popular candidate for Biden's Treasury Secretary. It was later said that Biden was worried that after appointing Brainard, the Federal Reserve would not have a single senior Democrat official. Meanwhile, Brainard continues to work for the Federal Reserve and will most likely be appointed Chairman of the Federal Reserve in early 2023. Of course, as the former chairman of the Federal Reserve, Ms. Yellen has worked for the Federal Reserve for more than 30 years, so she should be able to influence monetary policy while managing the Treasury Department. After the COVID-19 pandemic, modern monetary theory (MMT) became popular, and the boundary between fiscal policy and monetary policy was blurred. Therefore, the Federal Reserve continues its zero interest rate and quantitative easing policy, and the continuous release of liquidity should be the center of current policy. However, if the inflation rate rises in the second half of the year, there is also a considerable probability that the Federal Reserve will tighten monetary policy at the end of the year. 3. The impact on the US stock sector is summarized above. The Biden finance team's fiscal policy, monetary policy, and regulatory ideas are all quite in line with traditional Democratic Party ideas. Corresponsibly, among the 11 major sectors of US stocks, the most important beneficiary industries should be healthcare, consumption, new energy, infrastructure, etc. In terms of enterprise size, small and medium-sized enterprises may receive more subsidies and other support, while large multinational companies will face more regulatory and tax pressure. Finally, I need to add that the actual power that the Biden team currently faces is far lower than the situation when Trump joined the White House in 2017. When Trump entered the White House, the Republican Party had a majority in both houses of the 115th US Congress at the time. In the Senate, the Republican Party voted 54 to 44 against the Democratic Party (2 additional independent senators). In the House of Representatives, the Republicans voted 246 to 187 against the Democrats. So Trump's tax cuts, deregulation...

2037d agoKevin Chen 陈凯丰#custodial #Financial policy #Chen Kaifeng

Expected return outlook for US stocks and major assets for the fourth quarter

There were huge fluctuations in all types of assets in the third quarter. What opportunities and challenges will investors face in the global financial markets, including the US stock market, in the fourth quarter? This article analyzes some macro drivers for the fourth quarter, suggests the main risk points, and makes some predictive analysis for your reference. 1. Briefly review the returns on major asset classes in the third quarter, and the financial market fluctuated greatly in the third quarter. Although major US stock indices hit record highs at the same time in August, there were sharp declines one after another in September, and all gains of the previous month were erased. In fact, September was a rare “total loss” month in history. From US stocks, to bonds, to gold, to crude oil, to real estate, all major asset classes have negative returns. The only positive return was cash in dollars. The US dollar exchange rate appreciated against the world's currencies as a whole, and the US dollar index rose 1.9%. The picture below shows the September returns for the world's major asset classes. The returns since this year. The returns for the past year and the past three years: (Returns for the world's major asset classes) It can be said that due to the appreciation of the US dollar, even traditional safe-haven tools, gold and US Treasury bonds, have caused investors' losses. Gold fell 4.2% during the month. Of course, the global stock market and real estate market also fell by more than 3%. The Nasdaq index, which is dominated by US technology stocks, has fallen by more than 11% in the last four weeks. Among them, many leading stocks such as Tesla Motors, Apple, etc. have fallen by more than 20% to 30%. The implied volatility of US stocks, VIX, has been hovering around 30% for a long time, far higher than the normal market situation of about 20%. The biggest risk for global financial markets in the second and fourth quarters: the US election This year is the US election year. According to the US Constitution, the first Tuesday in November is voting day. This year's polling day is November 3. 70% of the US population has the right to vote. Approximately 230 million voters will elect the US president, vice president, senators whose one-third term in the Senate expires, all members of the House of Representatives, governors of each state, state legislators, judges from each county, etc. Since the two parties in the US have huge differences on various issues such as the economy, society, trade, and law, this general election will have an extremely important impact on the future direction of the United States. The author will briefly analyze the two parties' main agenda for financial policies. If the Democratic Party wins the White House, a majority of seats in Congress, the governor, etc., their financial policies mainly include raising taxes for businesses and individuals, increasing supervision, increasing social welfare, increasing medical security, environmental protection, trade protectionism, etc. Candidate Biden proposed that the US corporate income tax will be raised from the current 21% to 28%, and the minimum tax rate for businesses will be added at the same time. The reason he made these claims is that large US tech companies, including Amazon, have avoided taxes around the world and have basically achieved an effective tax rate of zero. He believes this situation is unfair to other businesses that pay taxes. At the same time, America's current fiscal deficit is soaring, and the government needs to increase fiscal revenue. (Industries most affected by Biden's tax increase plan: communications, consumer goods, information technology) If the Republican Party wins the election, their financial policies include a second round of tax cuts, deregulation, privatization of health insurance, promotion of bilateral free trade negotiations, etc. The Republican Party has traditionally had relatively favorable policies for manufacturing and energy, and there are no very strict regulations on environmental protection. Finally, the Republican Party's policies have a greater advantage for American SMEs. As far as investors are concerned, Wall Street's conclusion is that if the Democratic Party comes to power, they can better allocate European, Asian stocks, and lower US stocks. In terms of industry selection, we need a high-grade pharmaceutical industry, a new energy industry, and a low-grade medical insurance industry. In terms of market capitalization, there is a need for high-cap stocks and low-allocation small-cap stocks. If the Republican Party continues to govern, it can place high dividends on US stocks and low on European and Asian stocks. In terms of industry selection, the traditional energy oil and gas sector, medical insurance sector, and manufacturing sector can be highly qualified. In terms of market capitalization, US SME stocks can be highly valued. Another risk for global financial markets in the third and fourth quarters: the coronavirus will have a serious negative impact on the global economy after the COVID-19 outbreak. In particular, the service industry, transportation industry, and global trade in various countries are having a huge impact. At present, China's economy has rebounded rapidly, but from European and American countries to major emerging market countries, the epidemic has not been completely controlled. With the advent of fall and winter in the northern hemisphere, the incidence of respiratory diseases will generally rise. If a second wave of COVID-19 were to occur, it would be a huge blow to the economies of all countries. Corresponding financial markets will also experience a sharp drop in the stock market and a rapid rise in volatility. Of course, the most important focus right now is the COVID-19 vaccine development situation. Currently, there are multiple coronaviruses around the world...

2116d ago#US elections #US stocks #Chen Kaifeng

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