On July 21, 2024, in Ankara, Turkey, a mobile phone screen in front of a computer screen showed the letter from US President Joe Biden announcing his withdrawal from the campaign. The computer screen showed President Biden and US Vice President Kamala Harris. photo.
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The “Trump deal” may be over after President Joe Biden drops out of the 2024 presidential election in favor of Vice President Kamala Harris.
Biden’s shocking debate performance and an assassination attempt on former President Donald Trump prompted markets to price in a re-election for the Republican challenger.
Trump trades refer to stocks expected to benefit if the former president returns to the White House.
CNBC previously reported that Wall Street sees a Trump win as equally positive for stocks, as the Republican candidate calls for lower taxes and less regulation. Instead, traders predict green energy stocks will be hit by Trump’s proposed tariff hikes, which some economists say could lead to higher inflation.
Asian stock markets were mostly lower on Monday morning, the first region to resume normal trading following Biden’s announcement.
Michael Brown, senior research strategist at Australian brokerage Pepperstone, told CNBC that an exit was largely expected given the Democrats’ mounting pressure and “disastrous debate performance.”
Brown said he expects volatility across asset classes given the uncertainty that has been injected into the election and the race for the White House is now more open. The strategist predicts the dollar will weaken as some of the “Trump trade” unwinds, adding that he sees a slight increase in prospects for a Democratic victory.
He also expected stocks to fall in the short term, but noted that any decline should be viewed as a medium-term buying opportunity because the Fed is still expected to cut interest rates and economic and profit growth remain resilient. The U.S. is due to release second-quarter personal consumption expenditures data – the Fed’s preferred inflation gauge – on Thursday.
David Roche, president of Quantum Strategies, said in a note earlier Monday that Harris is likely to receive Democratic support, noting that “changing Harris at this point would lead to greater confusion and will raise many questions about available funding” for the Biden-Harris joint vote. “
Roach, however, said Harris’ nomination increases Trump’s chances of winning but lowers the chances of Republicans winning both houses of Congress.
a whole new game
In contrast, Charles Myers, founder and CEO of consulting firm Signum Global Policy, took a different stance on Harris’ potential nomination.
Myers told CNBC’s “Squawk Box Asia” that Harris’ emergence as the front-runner for the Democratic nomination makes it “a whole new race.”
“There’s a new candidate who has tremendous unity and enthusiasm behind her. She’s going to be a key mover for women, young people, black voters… I think people will underestimate her,” he added.
Harris has already made history as the first woman and first black person to serve as vice president. If she wins the Democratic nomination, she will become the second woman to run for president, following Hillary Clinton in 2016.
“I think it’s too early for the market to declare Trump the winner, and I think she’s going to have a real competition with him,” Myers said.
Like Pepperstone’s Brown, Myers added that the “Trump deal” is risky, at least in the short term.
Myers said Harris will have a running mate selected by the time the Democratic National Convention begins on Aug. 19 and predicted she will “win the nomination with tremendous momentum,” putting the vice president ahead in the polls. Trump.
“That’s a pretty good performance across a lot of names and other asset classes tied to a Trump win, but it’s also sitting too far back and a campaign that just fell into complete disarray… I would assume Trump is about to win, and we’re going to be very cautious, a little cautious.
