US Presidential Primaries Could Give Investors Some Welcome Respite
The markets are getting increasingly volatile with daily moves apportioned to any number of factors from China, Russia and Syria to low commodities prices and, of course, the Brexit.
Let's not forget that we also have problems with negative interest rates and Sovereign debt issues are coming to the fore again.
It's certainly not easy investing in the current climate.
With all this noise we may not see any clear stock market movements as a result of the primaries or caucuses as Trump, Hillary & co. fight for delegates.
Having said that, the Presidential nominations are worth a closer look.
Unsurprisingly, any stock market movements
are likely to be focused around the swing States like South Carolina where there are Republican and Democrat primaries on 20 and 27 February respectively.
If there is a negative reaction on the back of a vote then, depending on the other news of the day, that could present investors with a buying opportunity.
Any dips based on the nominations are likely to be short lived but they could also offer buying opportunities because, in the short-term, most results play into the hands of the financial markets
Hillary Clinton represents continuity which stock markets like.
Bernie Sanders has made a lot of noise, and he polls well, but he is still trailing Clinton by some way in the race for delegates.
In America, Sanders is the equivalent of Ed Miliband or Neil Kinnock, he's unelectable.
If Senator Sanders's results do improve then we are more likely to see a Republican President. That is also a result the markets would embrace.
The results of the various Republican primaries and caucuses won't concern the financial markets for some time.
Further down the road there is increased risk if the Presidential race ends up being Bernie Sanders vs Donald Trump or Ted Cruz. In that scenario it will be difficult to predict a winner amongst the extreme candidates.
For now though, the primaries and caucuses could present interesting opportunities and some welcome respite for investors.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Adam Jepsen, 19 February 2016