Trump's Verdict Shakes Market

London: 3 June 2024 (TraderMade): The recent guilty verdict against former President Donald Trump for falsifying documents has raised concerns about increased market volatility. However, experts suggest this might be good news for investors.

Market Reactions to Political Events

Despite initial market calm following the verdict, Ed Yardeni of Yardeni Research sees this as an opportunity for investors. He explains that market sell-offs related to political crises often present buying opportunities.

Yardeni emphasizes that the economy remains the primary focus of the market, and any political impact on the economy will subsequently affect the stock market.

Election Impact and Volatility Predictions

As the election season intensifies, market volatility is expected to rise. Kim Wallace of 22V Research predicts that the VIX, or fear gauge index, will likely see significant activity by mid-summer as the market starts reacting to various election outcomes.

Goldman Sachs strategists also note that the summer convention season often brings substantial market movements, indicating that political events can heavily influence market behavior.

The Republican National Convention in July and the Democratic National Convention in August are key events to watch. Although the VIX has been unusually low this year, closing below 12 for the first time since 2019, it remains well below its historical average of 19.9, suggesting potential volatility ahead.

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