The stock market session that followed to the attempted assassination of Donald Trump The event on July 14 marked a new scenario for many investors. The Republican candidate emerged almost unscathed after being shot, and his image, fist raised with traces of blood on his face, went around the world. Few doubted then that this powerful snapshot multiplied his chances of victory against a physically weakened Joe Biden who was losing internal support day by day after a disastrous debate. The companies that a priori would benefit most from a Trumpist victory, from owners of private prisons such as Geo Group and CoreCivic, arms manufacturers such as Smith & Wesson Brands and Sturm, Ruger & Co, bitcoin, or the candidate’s own media empire, Trump Media, immediately reflected this with increases in their stock prices.
The party was ready… until Kamala Harris came along. Her emergence after Joe Biden’s resignation has reduced Trump’s options, behind in the polls in the last three weeks: according to the surveys of the aggregator According to RealClearPolitics (RCP), Harris now has a 48.4% chance of winning the presidency, compared to the Republican’s 46.9%. And caution, if not fear, has gripped those who put their money into stocks sensitive to a Trump defeat. That fear is more than just a perception: the investment bank Goldman Sachs created two stock indexes, one that would benefit from Trump’s policies and another that would do the same with Harris’s, and their evolution on the stock market until Tuesday could not be more revealing: while the Democrat’s stocks rebounded 6% since Biden left, the Republican’s fell 4%, in a curve that has followed opposite trends.
There has been much talk in the last month about the so-called Trump Tradeor what is the same, to invest in the companies that will win a new mandate from the New York politician. Among others, the list of Goldman shares includes oil companies such as Exxon and Chevron —benefited by the Trump’s climate denialismand his refusal to reduce the use of fossil fuels—, American car manufacturers such as General Motors and Ford, which he would help against foreign competition, especially from China, big pharmaceutical companies, private health insurers, private educational institutions, banks and the aforementioned weapons and prison companies. The latest sector that Trump is shamelessly courting is cryptocurrencies: he attended a mass event in Nashville, and his statement states that he owns between $1 and $5 million in ethereum, the second largest cryptocurrency after bitcoin.
Much less noise has been made Harris Trade. Analysts are placing renewable energy companies, infrastructure companies, electric car makers and companies exposed to China, which would be spared from the expected escalation of the trade war with Trump’s protectionist policies. Goldman Sachs’ list includes potential winners of a Democratic victory such as Enhpase Energy, a solar energy company, retail chains Kohl’s and Gap, and electric car makers Rivian and Lucid.
The paradox is that one of the most active billionaires in defense of Trump, the controversial Elon Musk, founder of Tesla, would have more reasons on paper to support Harris’s policy of promoting electric vehicles than Trump, who during his campaign has been contradictory in his comments about them. First he attacked electric cars, and even floated the idea of ending public aid for their purchase, and then, perhaps due to Musk’s growing influence, he called them “incredible.” However, Musk’s immersion in the waters of politics, positioning himself against immigration, predicting a civil war in Europe, and sounding like a future advisor to Trump if he wins, seems to have much deeper roots than the Republican’s greater or lesser aversion to electric cars.
Trump has taken a similar path with Bitcoin to that of the electric car: in 2021 he said it was a fraud and that he didn’t like it because it competed against the dollar. Now, with cryptocurrency investors turned into a lobby of 50 million potential voters who have showered candidates’ campaigns with $119 million in donations, procriptohis opinion has changed. At the Bitcoin 2024 event in Nashville in July, he promised to create a federal strategic reserve of bitcoins and to fire Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), the man who has most actively tried to regulate the sector, and therefore the most hated by the crypto believersSince that intervention until today, with Kamala Harris already in the race, bitcoin has lost 12%.
The Democrat has been much more discreet with the cryptoasset sector, which has never been on good terms with her predecessor, Joe Biden. Despite her low profile, members of Harris’ team have met with some big crypto entrepreneurs, but she has not had any great ties with them, at least in public. She avoided going to Nashville, where she was invited, and has not touched on the subject in her speeches, possibly because she has much to lose and little to gain by placing the issue at the center of the debate and facing a Trump devoted to the crypto cause.
One of the proposals that could cause the most concern on Wall Street is to raise the corporate tax rate from the current 21% to 28%. In 2017, Donald Trump undertook the largest reduction in recent history, lowering it by 14 points from 35%. Now, Harris aims to recover some of that revenue by getting large corporations to contribute more and creating new opportunities for the middle class. It won’t be that simple: a victory without controlling both houses of Congress would limit her room for maneuver.
Follow all the information of Five Days in Facebook, X and Linkedinor in our newsletter Five Day Agenda
Newsletters
Sign up to receive exclusive economic information and the most relevant financial news for you
#Kamala #Harris #rise #pace #investors #bet #Trump