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For many analysts, the biggest risk for financial markets in 2024 is the geopolitical risk linked to the various elections that will occur around the world and which could reshape international relations. Let’s discover in this article some of the most important elections that could impact the markets in 2024.
2024: Historic year in the number of elections
In 2024, a new record will be set for elections and a test of democracy with the holding of more than 60 elections where almost half of the world’s population will be able to exercise their right to vote. These elections will include presidential, legislative, regional, as well as municipal polls, covering different electoral processes throughout the year.
What are the most important elections of 2024?
Taiwan continues to support a pro-independence president
On January 13, 2024, William Lai won the Taiwanese presidential election, ending his years-long tenure as vice president. As the leading candidate of the Democratic Progressive Party (DPP) championing the pro-Taiwan independence stance, the new president will face several challenges, including a divided parliament, which could have significant implications on the implementation of his agenda politics and the country’s relations with China. He will officially take office on May 20, 2024.
A woman at the head of Mexico
The date of June 2, 2024 will be an important date for Mexicans, because they will have to choose between Claudia Sheinbaum, mayor of Mexico City, and Xóchitl Gálvez, Mexican senator. A woman will therefore take the helm of power for the first time in the country’s history. While Claudia Sheinbaum is the favorite of the ruling Morena party (Movimiento de Regeneración Nacional or National Regeneration Movement), Xóchitl Gálvez is part of the opposition.
Many elections in Africa
The continent is preparing to experience an intense electoral year in 2024 with presidential and general elections planned in almost 20 countries on the continent. Several African nations could therefore experience changes in their majority, such as in South Africa, Algeria, Madagascar and Tunisia. Other countries on the continent, such as Mali, Senegal, Burkina Faso, Ghana, Chad, South Sudan, Ethiopia, Mozambique and Namibia, will also hold elections this year.
USA: Trump vs Biden again?
In November 2024, American voters will have to decide whether they wish to renew Joe Biden’s mandate as President of the United States or replace him with a Republican, most likely Donald Trump, despite his numerous legal problems. Historical data suggests that the S&P 500 has performed positively in election years more than 80% of the time since 1928.
Renewal of the European Parliament
The European elections, which will take place from June 6 to 9, 2024, will allow Europeans to choose their representatives in the European Parliament, made up of 720 European deputies, also called MEPs. Each country has a fixed number of deputies depending on its population. Depending on the results, the European Parliament could hinder the development of European legislation or reject the budget.
Other 2024 elections
Among other important elections to follow in 2024, Southeast Asia’s largest democratic country, Indonesia, will have to choose a successor to its current president, Joko Widodo. We also find the elections in India and South Africa which could respectively support a 2nd term for the current Indian Prime Minister, Narendra Modi, and a 2nd term for the current South African President, Cyril Ramaphosa. The United Kingdom, Pakistan, Belarus, Russia, Brazil, Panama and Venezuela, among other elections, will be followed in 2024.
How to benefit from these elections on the financial markets?
Elections, especially presidential elections, can have a significant impact on various aspects of government policies of different countries, as they can influence the budgetary, tax, international and trade policies of different countries.
Possible adjustments to these different policies can influence financial flows between nations and reprioritize cooperation and competition, often creating a dynamic environment conducive to opportunities in financial markets.
Long-term investors may view this period as an opportunity to adjust their portfolios based on the long-term outlook arising from the new policies by focusing on certain business sectors that can benefit from the new policies.
On the other hand, the immediate reactions of the markets after the announcement of the electoral results can also be exploited by active traders, in particular through scalping and day trading. The increased volatility of certain assets can indeed offer short-term trading opportunities.