Finance executives fret as U.S. presidential vote too close to call

In this news, we discuss the Finance executives fret as U.S. presidential vote too close to call.

NEW YORK / LONDON (Reuters) – World financial leaders await a clear winner in the 2020 U.S. election after President Donald Trump claimed foul play in the fight for the White House, fueling fears of a prolonged tally that will maintain leading markets and businesses.

While the Republican incumbent has given the financial sector huge tax breaks and deregulation victories, Trump’s first term in office has also been marked by volatility and unpredictability, especially in international trade.

Wall Street leaned to the left in this election, with Democratic challenger Joe Biden edging Trump in fundraising in the financial sector.

Many leaders said they did not support all of Biden’s policies, but said they believed he would be more predictable and better for the country.

“There has been a lot of apprehension for this election. There were people who expected violence. The White House has been closed, ”said David Bailin, chief investment officer for the private banking arm of Citi.

“Guess what? Now we have something to fear. If there had been a clear election result, there would have been a day of activity. A prolonged struggle, given the type of tensions, could be something more. ugly, ”he said.

Global investors on Wednesday began to reverse some Biden trades that had caused major Wall Street indices to jump on Tuesday.

Several financial markets, including U.S. equity futures and the U.S. dollar, turned as swing state vote projections appeared to favor Trump.

Major European stock exchanges in London, Paris and Frankfurt rose nearly 0.5% at 10:10 a.m. GMT after earlier losses, while yields on 10-year Treasuries fell.

London-based banks that occupied the trading rooms overnight reported a long night of talks with nervous clients. The greatest commercial activity took place in the early hours of Wednesday, before volumes fell sharply before dawn.

Jim McCormick, global head of office strategy at UK investment bank NatWest Markets, said “everyone would be on deck” with such an uncertain outcome.

Analysts said it could be days before all votes are counted.

The experience was very different from that of November 9, 2016, when, without any pandemics, New York and other financial centers held informal bar parties, and Trump’s victory was called around 2:30 a.m.

This year Mike Novogratz, CEO of New York-based Galaxy Digital and one of the top Democratic donors and fundraisers tweeted about being home with a bottle of wine, looking at the results at television with his family.

In anticipation of possible protests, some buildings and shops have been blocked in cities, including Washington and New York.

Although there were few signs of disruption or violence on the ballot sites Trump’s claim of electoral cheating without citing evidence on Tuesday left some finance officials wondering if it was too early to rule out civil unrest.

“There’s no problem right now, but that’s only because there’s no answer right now,” said Billy Weber, CEO of Checkpoint Capital, a fixed income platform.

Others said financial companies could profit from the volatility.

“You start to see clients looking more and more to cover one or the other of the positions, then you start to see the volumes increase on risk management products,” said Johann Scholtz, research analyst on equities at Morningstar.

(For the latest results and news on the US elections, click: here)

‘PERFECT STORM’

The S&P 500 Index rose 48.8% during Trump’s tenure, which he frequently cited as a measure of success. But Trump was not uniformly liked by the financial industry.

He attacked business leaders, including JPMorgan Chase & Co CEO Jamie Dimon, and Wall Street leaders distanced themselves from Trump as he drew criticism for his handling of the pandemic and protests for racial justice.

But the U.S. financial sector is also worried about rising corporate taxes, a new crackdown on enforcement, and emboldened consumer surveillance under Biden. [L1N2HD1OK]

The former vice president has presented himself as someone who will unify the country and aligned himself with fiercely critical progressives on Wall Street.

Whoever wins, the global financial community prefers a decisive outcome.

“If we get a victory for Biden and a split in terms of which Senate remains with Republicans and Democrats in Congress, I think the markets would probably take it worse,” said Devan Kaloo, global head of equities at Aberdeen Standard Investments.

Still, some young Republican finance leaders have said they plan to come together to celebrate Trump’s victory.

Charles Kolean, a 25-year-old investment worker who spent months raising money to re-elect Trump, said he booked part of a Dallas bar where he and a hundred or so friends were planning to toast four more years for the president, although wearing masks.

“The perfect storm is coming together to make Donald Trump a president for two terms.”

Reporting by Imani Moise, Svea Herbst-Bayliss, Lawrence Delevingne and Anna Irrera; additional reporting by Suzanne Barlyn, Iain Withers and Simon Jessop, written by Lauren LaCapra and Sinead Cruise; Edited by Michelle Price, Peter Cooney, Peter Graff and Barbara Lewis

Original © Thomson Reuters

Originally posted 2020-11-04 12:16:11.

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