Why the US elections determine the fate of the stock market: Long-term risk to US stability - WiWo commentary.

Why the US elections determine the fate of the stock market: Long-term risk to US stability - WiWo commentary.

According to a report by amp2.wiwo.de, a comment in BörsenWoche 442 warns of the fateful choices for the stock market, especially US stability. It is pointed out that an economically robust America can no longer be taken for granted and that without healthy American stock markets there could be a risk of mini-returns. The US has a weight of 70 percent in the MSCI World global stock index, and its large companies, particularly in the technology sector, have contributed significantly to stock returns in recent decades. Without the USA, investors would not have been able to really increase their wealth with stocks, and there are warnings about the risks of a possible paralysis of the US economy and the capital market.

It should be noted that the USA already has a debt ratio of 124 percent of economic output and a budget deficit of around seven percent. There are no countermeasures in sight, which increases the risk of a debt crisis.

A possible paralysis of the US economy and the capital market would be of considerable importance not only for the US, but also for the global stock markets, as the US has a major influence on the MSCI World. If the US economy actually slows down, investors could expect a decline in annual returns. This could impact the entire financial industry and cause investors to reassess and adjust their investment strategies. It is also possible that this will lead to increased volatility in the stock market as investors adjust to the changing situation.

It is therefore crucial to keep a close eye on developments in the USA and analyze possible scenarios in order to be able to react accordingly. A diversified investment strategy is particularly important in order to protect yourself against potential risks and take advantage of opportunities.