Americans, nay, the world, are eagerly awaiting to find out who will be the next president of the United States. With the upcoming election on Nov. 5, either former President Donald Trump or Vice President Kamala Harris will step behind the desk of the Oval Office.
While everyone is wondering what it will mean for global politics, a few others are asking what it looks like economically the day after the election — particularly if it is a historic win for Harris.
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GOBankingRates spoke with financial expert David Materazzi, CEO of Galileo FX, an automated trading platform, to get four economic predictions for the day after the election if Kamala Harris wins.
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“If Kamala Harris wins, the stock market’s going to react — no question about it,” predicted Materazzi. “Right off the bat, we’ll see some short-term volatility. Investors don’t like uncertainty and her policies, especially around taxes, will shake things up in sectors like tech and finance.”
But here’s the thing that Materazzi truly believes: Volatility creates buying opportunities.
“Once the dust settles, the market usually rebounds and those who buy in early could do well,” Materazzi said.
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Materazzi stated that Harris wants to raise corporate taxes.
“That’s going to squeeze profits, especially for the big players,” he said. “But the smart investor knows strong companies can handle it.
“The tech and healthcare sectors have robust fundamentals, and even with tighter margins, they’ll continue delivering returns. You’ve just got to focus on businesses with a real edge.”
Inflation is a risk with all the government spending she’s proposing, according to Materazzi.
“The Feds will probably respond by hiking interest rates, which tends to hurt growth stocks,” said Materazzi. “But companies with pricing power (those that can pass costs on to consumers) will still perform well. You want to stick with firms that have solid balance sheets and can weather the storm.”
“On the flip side, her policies to boost middle-class incomes could fuel consumer spending,” he continued, noting how that’s a good thing for retail, housing and services.