Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
Chief Investment Strategist
This contents of this article should not be considered investment advice. Market conditions and political developments are subject to change, and investors should conduct their own due diligence before making investment decisions.
In a not-so-surprising move, President Joe Biden has announced he will not seek re-election in 2024 and has thrown his support behind Vice President Kamala Harris to become the Democratic nominee. Democratic State Party Chairs and leaders have come out in broad support for Harris’s nomination, and campaign donations also jumped higher in the immediate hours after the announcement.
This changes the stakes for the US presidential election, which was seemingly tilting in broad favor of the Republican Party and former President Trump after a series of events over the last few weeks, including the dismal performance of President Biden at the first debate, questioning his health, an assassination attempt on Trump, and a united front from his party at the Republican Convention last week.
But markets now have to brace for a more competitive race. Some of the Trump Trades could unwind, but not all. Some parts of the market could also be concerned about the odds of the first-time presidential candidate Harris to beat Trump. Let us assess what this closer race could mean for the markets:
However, these assessments remain speculative and are subject to change as the election cycle unfolds.
It is crucial to remember that we are still more than three months away from the US election, and over time, market reactions will depend on each candidate's potential policy changes. What we can be certain of now is the heightened political uncertainty, which may lead to increased volatility for investors.
While market reactions will continue to evolve, several upcoming events will be critical in determining how Harris’s nomination translates into electoral success and market sentiment:
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial professional before making investment decisions.
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