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However, Pennsylvania changed the facts as market analysts believed Former US president escapes virtually unscathed Now winning the presidential election by a significant margin.
Currently, betting markets predict that Trump has a 70% chance of becoming the next US president. Kon Goh, head of research for Asia at ANZ Bank, was unsure about the market’s reaction. However, he believes that “Bitcoin’s gains are likely driven by concerns about more civil unrest. We may see some risk-off moves as markets open, but this should fade quickly.” The popular cryptocurrency rose 2.7% to $60,160.71 after an assassination attempt on Donald Trump sparked speculation that his chances of winning the presidential election had increased.
“I think it could increase the chances that we could see some safe-haven inflows in the morning,” Nick Twadale, chief market analyst at ATFX GLOBAL in Sydney, told Bloomberg. “I think gold could test all-time highs, and we’ll see positioning in the yen and the dollar, as well as capital flows into government bonds.”
How markets reacted after Biden-Trump debate
“The shooting is likely to boost support for Trump and further build on the positive momentum he enjoyed following his debate with Joe Biden two weeks ago,” Guo Rongren, portfolio manager at East Spring Investmnet in Singapore, told Reuters. “The market reaction to a possible Trump presidency has been characterised by a stronger dollar and a steepening U.S. bond curve, so if his chances of being elected are seen to improve further following this event, we could see a similar dynamic next week.”
There aren’t many similar events in U.S. history. Four years ago, when President Ronald Reagan was shot, stocks plunged before closing early. The next day, March 31, 1981, the S&P 500 rose more than 1%, and the benchmark 10-year Treasury yield fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
“As far as I remember, Reagan went up 22 points in the polls after the assassination attempt,” Nick Feres, head of investments at Vantage Point Asset Management in Singapore, told Reuters. “Trump has been more ‘pro-market’ – the key question for us is whether fiscal policy remains irresponsibly loose and what that might mean for (resurgent) inflation and the path of interest rates going forward.”
What analysts expect from the economy under Trump
Market analysts expect that Trump may take office as the new president, with more aggressive trade policies, less regulation and more relaxed climate change regulations.
Investors also expect an extension of corporate and individual tax cuts that expire next year, adding to concerns about rising budget deficits.
Trump said in an interview in February that he would not reappoint Jerome Powell as Federal Reserve chairman, whose second four-year term ends in 2026.
Bond bell
Long-term bond yields have risen along with the likelihood of a second Trump administration.
While the move in the still-inverted Treasury curve has been driven primarily by changing expectations for the Fed’s first rate cut of the cycle, the spread between 2-year and 30-year bonds has narrowed to minus 6 basis points from minus 30 basis points when the Fed cuts rates. Biden and Trump debate.
The closely watched spread between two-year and 10-year bond yields was minus 27 basis points, just half its level three weeks ago.
Bond investors should pay close attention because the attack could boost Trump’s electoral chances, said Marko Papic, chief strategist at BCA Research, based in California.
“I think the bond market must at some point realize that President Trump has a better chance of winning the White House than any of his opponents,” Papic wrote. “And I continue to believe that as its likelihood increases, the likelihood of a bond market ‘rebellion’ should also increase.”
Trump’s trade stance
Assets tied to the so-called Trump trade include the U.S. dollar, bonds, private prison stocks, credit card companies and health insurance companies. Investors believe Republican policies on tariffs, immigration and deficits will lead to a stronger dollar, higher bond yields and a more favorable environment for these stock sectors.
Wall Street
Beyond the focus on Trump’s assassination attempt and Trump’s trade investments that could bring profits to Wall Street, a shift is beginning to take place. On Thursday, the tech-heavy Nasdaq 100 posted its biggest drop of the year, while the small-cap Russell 2000 had its best day since 2024. The Nasdaq 100 is up about 21% this year, while the Russell 2000 is up just 6%.
Small-cap stocks and the benchmark S&P 500 extended gains on Friday despite gains in technology shares.
Investors warn that the move could be followed by a sharp reversal after the performance gap between the tech sector and the rest of the market widened. Moreover, recent stretches of market expansion have been short-lived: For example, small-cap stocks surged in late 2023 when investors believed rate cuts were imminent, but lagged in the months that followed.
source: Ott
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