The US Election & Australia's Economy

How is the US election affecting Australia's economy?

America is currently digging itself out of the deepest US recession since the 1930s and 1940s, in addition to high unemployment rates, civil unrest and the biggest health crisis in a century. The situation in America is causing uncertainty world-wide, and the upcoming Presidential Election is bringing about further unrest. But what effect is the US election having on our economy here in Australia?

The US election is affecting the Australian share market more than any other investment type, as the fortunes of the ASX are intrinsically linked to how the US markets perform. As we've heard it said - when America sneezes, Australia catches a cold.

Back in 2016 when Trump won the Presidential Election, the S&P/ASX 200 took a big dive. With the uncertainty in America at the moment, stocks are moving up and down on a daily basis.

It is more than likely that the US election (to be held on Tuesday, 3rd of November) will be a market-moving event and it is unlikely that we will see any form of stability within the share market until then.

The extreme nature of this election makes it hard to predict how markets will react, but whatever happens we should expect some large moves either way. Whether it is Trump or Biden that wins the election, the outcome will indeed dictate our market.