LiteFinance Says Traders Should Expect An Unstable Market During US Midterms
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Retail forex and contracts for difference (CFDs) broker LiteFinance have warned customers that they may experience an “unstable market” before and after the US mid-term elections. The election is usually conducted to elect new members of Congress mid-way into the US President’s four-year term.
Due to the election, LiteFinance has announced that there is a possibility of customers getting wider volatility, wider spreads, price gas, or lower liquidity. The warning comes in line with the correlation between market performance and elections.
LiteFinance Advises Traders To Keep A High Margin Account
The broker also revealed that it will have the liberty to upgrade margin requirements on all trading servers. LiteFinance advised traders to consider such information when they are trading on the platform. It means that traders need to have enough margin in their accounts during the politically motivated market period.
An institutional research brokerage firm, Strategas, stated that equity traders seem to be in support of a House of Representatives and US Senate controlled by Republicans. They believed that the type of policies they will approve will favor the market compared to the policies initiated by Democrats.
More Market Participants Expect A Republican Domination
Stocks levered to a Democrat sweep continue to underperform against those levered to a Republican sweep. It’s an indication that the market is tilting towards a Republican-dominated Senate and House of Representatives in the election.
Chief Economist at Goldman Sachs, Jan Hatzius, believes that more participants in the market are expecting Republicans to swoop the majority of the seats. Based on the expectation, the market could witness a muted reaction if that happens.
In the meantime, on Tuesday stock futures surged as investors were in a highly expectant mood for the predictions to become a reality. S&P 500 futures added 0.35% while Dow Jones Industrial Average futures surged by 0.33%. On the other hand, NASDAQ 100 futures had an increase of 0.63%.
LiteFinance rebranded from LiteForex last year, saying the decision was part of a significant restructuring it made to its group of companies. Additionally, earlier this year, the company expanded its operations in Asia after opening a new regional representative office in Singapore.
