What did the first US presidential debate tell us about US equities? What did the first US presidential debate tell us about US equities? What did the first US presidential debate tell us about US equities?

What did the first US presidential debate tell us about US equities?

Equities 5 minutes to read
Peter Garnry

Head of Saxo Strats

Summary:  In our Q4 Outlook we are focusing on the upcoming US election and part of our analysis is to provide our best guesses of US election basket on equities given either a Biden or Trump victory, or eve worse a contested election. The question is whether the first US presidential debate as made us wiser in terms of how the equity market views the election. In general the market is marginally negative on Biden, but the subsequent price action following the debate showed that what matters the most is fiscal stimulus which the US economy desperately needs.

This Tuesday we had the first US presidential debate which was chaotic event as described by John Hardy in his FX Update. US equities were choppy during the debate and decided in the end that the debate had probably increased the odds of a Biden victory causing US equity futures to sell off in the early hours of September 30. However, turned around during the session and rallied hard into the close on the first trading day after the debate on the prospects of fiscal stimulus coming as Nancy Pelosi, Speaker of the House, and US Treasury Secretary Mnuchin were converging on views over stimulus.

Source: Bloomberg

Only three industry groups were down on the 30 September with most groups gaining more than 0.5%. Due to the stimulus talks impacting price action in US equities it is difficult to isolate the market’s reaction function of the first US presidential debate across the different industry groups. Crude oil was down significantly ahead of the debate and thus negatively impacted energy stocks the following day. A general observation from those days of price action is that the market cares more about stimulus than the US presidential debates, or dare one say, maybe equities do not care much about who is US president.

S&P 500 Industry GroupReturn 1DReturn 5YR
Health Care Equipment & Services2.24100.4
Automobiles & Components1.48-4.5
Food & Staples Retailing1.4462.5
Diversified Financials1.3664.1
Technology Hardware & Equipment1.23256.0
Pharmaceuticals, Biotechnology, Life Sciences1.252.1
Household & Personal Products1.1899.7
Food, Beverage & Tobacco1.1436.0
Software & Services0.89218.0
Real Estate0.5846.5
Consumer Durables & Apparel0.5740.0
Telecommunication Services0.5541.4
Consumer Services0.3363.2
Commercial Professional Services0.2394.7
Media & Entertainment0.0374.7
Capital Goods-0.1754.7

Source: Bloomberg and Saxo Group

Return 1D is the return on the first trading day following the first US presidential debate

As the first day of trading after the debate did not provide much colour on the individual industry groups we are not updating our US election scenarios on equities depending on the outcome. These estimates are also presented in our Q4 Outlook and are based on campaign policy statements and our best guesses on how the market could react after the US election. With the US president tested positive for Covid-19 it is not even given that the next scheduled US presidential debate on 15 October will go ahead. However, if changes in polls or any future debates changes our views, we will update our views.


The chart below is a 5-year chart of S&P 500 futures which is an EU compliance requirement.

Source: Saxo Group


The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.