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"The market doesn't care which President it gets"

ended 25. September 2024

With the US election fast approaching, Newspage asked experts what outcome they think the markets will prefer — and why? Would markets rather see Donald Trump back in the White House or Kamala Harris? Their views are below.

4 responses from the Newspage community

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Paul Della Guardia
Economist & Founder at Sovereign Vibe
While Harris's proposal to ban price gouging in August was ill-received, markets will favor her centrist stance on the economy over Maganomics. Trump's plans are more radical than the economic policies he enacted during his first term. These include across-the-board 20% tariffs on all imports, and 60% for China. This wouldn't only reconfigure the US's trading relationship with the world and alter global trade patterns, but would also change the composition of US government revenue. Harris is due to release details of her economic policies tomorrow, with a continuation of Biden's protectionism and national security concerns expected to feature heavily. The uncertainty over the election outcome (and Trump's acceptance of it), Trumponomics, and even ongoing protectionism under Harris are mostly market-negative. Overweighting a risk-appropriate long-volatility strategy would be consistent with this thesis.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
The US election is shaping up to be a $30 trillion tug-of-war, with markets poised on a knife-edge and the candidates presenting a stark contrast for investors. While conventional wisdom might suggest that markets favour a Trump presidency due to his pro-business stance, emphasis on tax cuts and deregulation, the reality is nuanced. His unpredictable nature and protectionist tendencies have previously caused significant market volatility. Alternatively, Harris, despite her progressive rhetoric and concerns about increased regulation, represents predictability, which the market values. For the UK, Trump could accelerate negotiations for a bilateral trade deal but might also complicate the delicate post-Brexit landscape. Harris, conversely, may prioritise ties with the EU, leaving the UK in a less advantageous position. As savvy investors craft their 'Presidential Portfolios,' a divided government might be the outcome, but will it lead to united markets or unprecedented volatility?
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David Belle
Founder and Trader at Fink Money
It's a complete folly to focus on which President the market will prefer. The market doesn't care which President it gets. All the market cares about is SPX earnings growth, rates being cut and whether people will be unemployed or not. Right now, expected SPX earnings for 2025 is expected at 15.2%. Why would a new president disrupt this? I mean, sure, Kamala might introduce unrealised gains tax... in a parallel universe. It's never happening because it doesn't make sense whatsoever. We are in a bull market so to anyone that wants to sell based on the US election, I will be there waiting, with leverage.
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Prem Raja
Head of Trading Floor at Currencies 4 You
Currently, it still seems to be a toss of the coin between Trump and Harris as to who will be elected. Harris seems to be gaining in the polls, but President Trump has proved before that he is a force to be reckoned with in an election. From an FX perspective, markets seem to be pricing that a Harris win will cause a weaker Dollar, with EURUSD forecast to rise to 1.14 on a Harris win. On the flipside, a Trump win would potentially mean a stronger Dollar with EURUSD forecasted to drop to the 1.07 region. Risk is positive in stocks at the moment and that is with the prospect of a Harris win. I think irrespective of who wins, the stock markets will enjoy a rally going into the winter. However, crypto markets may perform better under a Trump presidency as he has shown more lenience to the crypto markets.