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Claudiu Cazacu, an analyst at XTB Romania, said that the decision to convict former President Donald Trump on 34 charges related to falsifying accounting documents caused an uproar in the US public sphere, but the markets were not really shaken.
Donald Trump was convicted of 34 felonies. Professional Media Photo
S&P 500 Score Impairment The stock opened with limited losses on Friday, the first full day of trading after the news, before rebounding strongly in the final hours of trading, rising 0.8%.
However, the performance of the share price of Trump Media & Technology Group (DJT), which owns the social network Truth Social, was even more spectacular. Looking at the pre-market gains, the stock opened with a 9% drop, before recovering to -5.3% at the close on Friday.
However, the stock market continued to fall on Monday, falling again by 4.8%, while the S&P 500 rose by 0.11%. Claudiu Cazacu said that compared with the benchmark of other social networks, the company’s $8.3 billion capitalization, which had $4 million in revenue and a loss of $60 million last year, seems to be from another world.
In April, the company’s 621,000 shareholders were notified via a note, “The vast majority It will be retail investors. Following the usual valuation logic, price swings occasionally reflect a struggle between buying stocks as a form of support for Donald Trump and economic prudence.
However, the impact of a jury conviction can be quantified using the stock market. Over the two sessions, the former president’s wealth was reduced by $550.8 million through the reduction of DJT.
On the other hand, apart from the companies that have concentrated most of Trump’s wealth, what are the other reasons for the indifference shown by the US stock market? How long can this practice last? First, the academic community is widely concerned with other topics, such as macroeconomics, international relations and enthusiasm for artificial BroadCast Unitedligence, leaving little room for political reflection.
Second, the public debt and budget deficit are increasingly relevant, while the differences in attention paid to this issue between the candidates are too small to trigger a strong reaction, says Claudiu Cazacu.
Third, it could be to save energy and capital. A variety of possible scenarios, from imprisonment to fines, would “draw” different subsequent dynamics. A president could be elected and govern even from prison despite seemingly insurmountable challenges.
However, Romania’s XTB Strategic Advisors noted that the risk of a violent split in American society following the arrest verdict may be too high to be ignored by the judge.
Trump supporters more loyal after conviction
The first reaction after the conviction was to “motivate” supporters. His campaign received $53 million in funds within 24 hours of the ruling. Some observers wondered if the conviction would not actually increase Trump’s re-election chances by mobilizing his base of supporters. On the other hand, betting market estimates of the election results showed that his chances had decreased.
According to RealClearPolitics, the probability rose from 51.8% to 47.7% on Friday, which is still much higher than the 39.2% probability of Biden’s re-election. However, if DJT shareholders are currently the most affected by Trump’s conviction, then investors should not be lulled into a false sense of security.
Attention will be focused on the election in the coming months, most likely in late summer to early fall, and market movements, particularly in September-October (but with occasional more volatile periods), are expected to include more pronounced reactions to political volatility as the environment changes. Plan LAN Claudiu Cazacu also pointed out the economic and geopolitical aspects of the coming years.
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