The stock market has seen lots of up and downs this year. After the pandemic situation took over the world, the global market witnessed a considerable fall in every sector.
However, as people have adapted to an unfamiliar situation, the stock market has also fought its way back.
And experienced traders are striking gold in this volatile market by placing trades through a stock API, which often makes swing trading and positional trading easier.
The stock market is showing some positive signs since Joe Biden won the US Presidential election over President Donald Trump. After Biden was named the United States president-elect, the global stock market followed an upward trajectory.
Here are the top-5 stock market trends that can welcome us as we enter 2021.
The Top-5 Stock Market Trends To Expect In A Joe Biden Presidency
The outcome of the US election is looking quite good for the stock market. Investors are eager to see what happens after Biden joins the White House. You can expect the following trends in the US markets under the new President:
Opportunities For Large-Cap Companies
Under Biden’s presidency, the large-cap equities have a high expectancy to show a positive trend. Large-cap equities will be performing better than small caps as large-caps are tied to the global economy. The trend may stay the same in the years to come.
Biden’s victory could mean the opening of numerous opportunities for big tech companies such as Alphabet Inc. and Apple Inc. These companies are the big and powerful companies of the US, which are dominating the markets globally.
With lesser trade wars, these companies can spread their wings wider.
Alphabet, Google, and other tech companies got good government support during the tenure of former president Barak Obama. Hence, Biden’s government is also expected to give the upper hand to these companies.
Trade Wars – Probably Not Anymore!
In the previous four years, the US has faced a challenging phase for international relations under the presidency of Donald Trump.
Donald Trump has caused several disagreements with Europe and some other countries and sparked a trade war with China. It has led to a significant downfall in the US market as well as the global markets.
However, Joe Biden is expected to be more collaborative with these countries and approach a healthy global trade relation. It means we can expect fewer trade wars and more trade negotiations.
More trade negotiations will lead to a better environment and opportunities for companies based in the US and other countries to grow. Companies and regions that are mostly dependent on and sensitive to the global economy are more likely to show a positive sign in the coming days.
Returning To Paris Agreement – Clean Energy & Fresh Air
Joe Biden has grand plans to tackle climate change and approach more environmentally friendly technologies. His goal for the US is to reach zero carbon emissions by 2050.
He has also pledged to rejoin the Paris agreement, the international plan for tackling climate change, from which Donald Trump withdrew the US back in 2017.
Some of the major sectors to look for investors during the implementation of such climate change goals are the automobile, wind, and solar.
Biden is more likely to offer more tax benefits to the owners of electric vehicles over the ones with gas-burning vehicles. Gas burning vehicles are more likely to get more stringent emissions rules.
Major automobile companies such as General Motors Co., Ford Motor Co., Tesla Inc., and Volkswagen AG may improve their bottom line. With high investments in electric vehicles, we may see increased growth in their sales in the coming years.
Moreover, the new government is more likely to invest in renewable energy, such as wind and solar power.
High Growth & Investment In Healthcare & Medical Technology
Biden’s government promises to provide affordable healthcare to everyone. We might see new efforts to boost the Affordable Care Act and expand insurance coverage and subsidies to help more people afford it.
The administrative changes during Trump’s presidency have weakened the ACA.
Biden looks forward to making those changes right and rolls back some if necessary. He also promises to introduce a public healthcare insurance option with the same benefits as private insurers.
During the COVID-19 outbreak, the US depended on other countries for several essential medical equipment and medicines. Biden says he wants the US to be ready and self-sufficient for any medical emergencies and pandemics. Hence, he wishes to see the production of all such medical goods in the US.
He also pledges to invest more in developing next-generation medical technology and making his country and the world ready for any such pandemics.
The Commodities Market Will Be In Focus
Biden’s presidency can mean more restrictions for non-renewable energy. Crude oil prices might hurt after Biden’s win. He had even said about his plans to ban new oil and natural gas drilling permits on federal lands.
With the restriction in oil and gas production, we can expect to see tighter supplies and higher prices. However, Biden might have plans to revive the Iran nuclear deal and relaxation sanctions. This means we can expect to see more oil in the global market from the Middle-East countries.
Meanwhile, the stock prices of metals, like copper, will rise. The Biden Administration is focusing highly on increasing the green energy revolution, and copper is at the core of the development. Hence, the prices of copper will rise significantly.
How To Trade Smartly In 2021 & Beyond
In the past, people looked at prices first and informed their brokers later. However, with the number of traders and investors on the rise, any delay could mean trouble.
Hence, experienced traders are opting for automated systems that can communicate between one application to the other and seamlessly inform your stockbroker.
These Automated Programming Interfaces (APIs) are codes written in a scripting language like Python. They bridge the connection between broker and coded algorithm platforms. You can also use them to automate trades without having to sit under the screen all the time.
Today, many brokers like Alpaca provide free stock API to users to catch the momentum, effectively. Since we cannot keep looking at the screen endlessly, it is important to use API to automate trades.
The Joe Biden Administration favors multilateral trade deals and has a considerably softer stance against China. He also wants to reenter the Paris Agreement and reinstate the Affordable Care Act. These will be driving factors of the market in the coming days.