Markets expect a landslide victory for Trump
Since the TV debate between Biden and Challenger Trump, the stock markets have been betting on a victory for the Republican. After the failed assassination attempt on the former US President, the assessment has solidified.
Following the attempted assassination of US Presidential candidate Donald Trump, financial markets need to recalibrate. The bullet that wounded the Republican at a campaign rally increases Trump's chances of winning - and consequently, financial markets may be significantly affected, according to investors. "The election is likely to be a landslide victory. This probably reduces uncertainty," said Nick Ferres, Chief Investment Manager at Vantage Point Asset Management. Rong Ren Goh, Portfolio Manager of Eastspring Investments in Singapore, expects the Dollar to continue its uptrend and investors to focus on a steeper yield curve for US Treasury bonds.
The incident occurred on a Saturday at a campaign event in the state of Pennsylvania. The motivation of the alleged shooter, a 20-year-old man who was also killed, remains unclear. The last assassination attempt on a US President or candidate was against Ronald Reagan in 1981. Following that incident, Reagan's poll numbers rose, explained Ferres. Trump has always been "more market-friendly," he added.
Market analysts anticipate a tougher trade policy, less regulation, fewer climate change regulations, and an extension of the corporate and income tax cuts set to expire next year under Trump. This, in turn, raises concerns about growing budget deficits under Trump. "The crucial question is whether fiscal policy remains irresponsibly loose and what the implications for inflation and future interest rate development could be," said Ferres.
Stock Markets Surge After Biden's Uncertain Performance
Doubts have been growing among Democrats about Biden's ability to defeat Trump and meet the demands of the office since his uncertain appearance in a TV debate two weeks ago. Along with the likelihood of a second Trump term, long-term US Treasury bond returns and stock prices have risen in the past two weeks.
Both the S&P 500 and the Dow Jones reached record highs on a Friday. According to Goldman Sachs analysts, CEO confidence, consumer sentiment, and particularly the optimism of small businesses have historically increased more significantly following Republican presidential victories than following Democratic ones. "If an improved mood leads to increased spending and investment, a Trump victory could improve the profit prospects of some companies without significant political changes."
Amidst the aftermath of the assassination attempt on Donald Trump, Wall Street analysts are reassessing their economic predictions for the United States Presidency Election 2024. The perceived vulnerability of Trump, as evidenced by the incident, may increase his appeal to voters and potentially bolster his chances of securing a second term.
The failed assassination attempt on Donald Trump at a campaign rally has sparked renewed interest in the stock market, with analysts suggesting that a potential Trump victory in 2024 could lead to market-friendly policies, such as fewer regulations and lower taxes, which could boost corporate profits.
