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Before the science and technology financial report, Biden retired again, and the market was more
Just as the US stock earnings week kicked off, Biden suddenly announced his withdrawal from the re-election campaign, and the pattern of the US election suddenly changed, adding new uncertainties to the financial market.
According to CCTV News on Monday, current President Biden announced his withdrawal from the 2024 presidential election and recommended Vice President Harris as the Democratic candidate to compete with Trump.
At present, traders are trying to cope with the uncertainty of the Fed's interest rate and the upcoming performance of technology giants. Now they must further weigh how Harris or other candidates will compete with Trump. There are still four months before the election, and there are too many unknowns. Traders are preparing for the "turbulent summer".
This decision has completely disrupted the original election expectations, and investors are weighing the potential impact of this change on the market. Some analysts believe that "Trump Trading" will begin to close its position and be optimistic about the performance of emerging market assets.
The market is currently calm.
The Asian market was "calm" in early trading, with S&P 500 index futures up nearly 0.4%, Bitcoin, a key indicator of political game, falling slightly, while the exchange rate of the US dollar remained basically stable.
On the whole, the immediate reaction of the market to this political upheaval is relatively calm. Previously, after the poor performance in the first TV debate, the market had expected Biden to withdraw from the election. Later, Biden was repeatedly discouraged by COVID-19's positive, party bosses and financiers.
This political turmoil occurred on the eve of this week's earnings report, and large technology stocks such as Alphabet and Tesla are about to announce their earnings reports.
Last week, the S&P 500 index fell by 2%, and investors increased their bets that technology stocks would lose their dominant position, while smaller companies benefited. The Russell 2000 index rose for the second week in a row, and the rotation of technology stocks and small-cap stocks continued.
However, some industries tend to be more sensitive to political changes. When trading resumes on Monday, investors worried about political influence may focus on cryptocurrencies, private prison operators and fossil fuel-related companies. Other areas of concern include industries with strict supervision such as finance and health care, and gun manufacturers.
Us stocks usher in "turbulent summer"
Biden's withdrawal from the election has brought great changes to American politics and added new uncertainties to the financial market. Investors are paying close attention to the development of the political situation to assess the potential impact of different candidates' policy positions on the market. In the next few months, the market may fluctuate greatly due to political factors.
Gene Munster, co-founder of Deepwater Asset Management, said:
This means that there will be more uncertainty in the short term. Before that, the market had great confidence in Trump's victory, and now it faces new unknown factors. The market doesn't like this uncertainty, as well as the news about who is elected and who is out, and all these unknowns.
Dan Suzuki, deputy chief investment officer of Richard Bernstein, said:
Its direct impact is to add uncertainty to the statement that the Republican Party is sweeping the market. Besides, everything is still unknown until the Democratic candidate is more clear.
Matt Maley Miller strategist Matt Maley thinks:
"Trump transactions" such as bitcoin and energy will begin to close, and some impacted transactions such as solar stocks or electric vehicles may rebound. But there are still many uncertainties, and the market doesn't like this. From now until September, we will see a sharp increase in volatility.
Jack McIntyre, global investment manager of Brandy, said:
For risky assets including emerging markets, the initial response will be positive. If all goes well, the Democratic Party can win the House of Representatives now, and the market generally hopes to see more such results, not the Republican Party's sweeping.
Jennifer Gorgoll, investment manager of Neuberger Berman LLC, thinks:
In the short term, the Fed's interest rate cut is expected to dominate the market, which may weaken the dollar and lead to the strength of commodities and emerging market currencies.
This, coupled with the broader risk appetite related to the Trump deal, may lead to an amazing growth in the market in 2025, and we believe that emerging markets may be the main beneficiaries.
Risk warning and exemption clause
The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.