Source: Wall Street See
In the first televised debate of the 2024 U.S. presidential election, incumbent President Biden and former President Trump clashed intensely, focusing on issues such as the withdrawal of troops from Afghanistan and the conflict between Russia and Ukraine. Both sides engaged in heated personal attacks, and the next 'verbal battle' will be held on September 10. As of June 25th, polling data shows that Trump is leading Biden by an average of one percentage point in national polls; in key 'swing states,' Trump leads by an average of 3.2 percentage points.
Economic and financial blog Zerohedge commented that the market is starting to actively digest the possibility of the Republican Party/Trump winning in November. Barclays strategists said in their latest report that the likelihood of former President Trump replacing current President Biden in the Nov 5 election seems to be increasing.
Barclays believes that the market should consider the significant risk of inflation rates being higher than target over the next few years. This view is consistent with a joint letter signed by 16 Nobel laureates in economics, who believe that Trump is a 'inflation bomb.'
According to data from Goldman Sachs' trading department, overall market activity on Friday 'exploded,' with trading volume increasing by 32% compared to the past two weeks. In contrast, trading volume has only increased by 1% compared to the 10-day moving average, highlighting the market's activity today.
Goldman Sachs said that overall, the selling activity in their trading department is 3% higher than the market average, with hedge funds and long-term investors inclined to sell:
The selling by hedge funds increased by 2%, mainly because the selling pressure in the technology and financial industries exceeded the buying pressure of non-essential consumer goods and material stocks.
The selling by long-term investors increased by 14%, with more selling of non-essential consumer goods stocks, especially after disappointing earnings announcements. Other areas with high selling pressure include essential consumer goods, healthcare, and industrial stocks. Technology, energy, finance, and real estate investment trusts (REITs) saw buying interest.$Nike (NKE.US)$Goldman Sachs's 'Republican/Democratic' stock basket significantly outperformed the overall market on Friday:
On Friday, although the core PCE price index for May in the United States showed a cooling of inflation, U.S. Treasury yields reversed their initial decline after the inflation data was released at the opening bell, with long-term U.S. bond yields soaring. The benchmark 10-year U.S. Treasury yield rose 9.59 basis points to 4.3823%, the 20-year U.S. bond yield rose 12.89 basis points, and the 30-year U.S. bond yield rose 13.45 basis points. Short-term U.S. bond yields rose moderately, with the two-year U.S. bond yield rising 2.07 basis points to a daily high of 4.7327%.
Some people believe that the trend of U.S. Treasury bonds on Friday reflects the expectation of Trump's victory, of course, the rebalancing flow at the end of the quarter/month also affects asset fluctuations.
Barclays strategists said that the trade is clear: buy inflation-protected assets to prepare for Trump's victory, specifically buying inflation-hedging assets in the U.S. Treasury bond market. This simple trade is betting that 5-year inflation-protected bonds (TIPS) will outperform conventional 5-year Treasury bonds, leading to an expansion in yield spreads between the two.
On Friday, most healthcare stocks rose. Ben Hendrix, an analyst at the Royal Bank of Canada (RBC), said Biden's performance was lackluster, and he expects the market to have more confidence in the managed healthcare/healthcare industry. If Trump returns to the White House, the healthcare industry is expected to have a more friendly regulatory environment, meaning that the Federal Trade Commission or the U.S. Department of Justice's review of vertical integration strategies will relax or even be canceled, which is expected to be particularly bullish for UnitedHealth.
Closing up 4.7%, at one point up nearly 7.3%, CVS Health rose by nearly 2.8% at one point, while Elevance Health rose by nearly 1.9%.
$UnitedHealth (UNH.US)$$CVS Health (CVS.US)$$Humana (HUM.US)$Once up nearly 7.3%,$CVS Health (CVS.US)$Once up nearly 2.8%,$Elevance Health (ELV.US)$Once up nearly 1.9%.
$Trump Media & Technology (DJT.US)$In pre-market trading, it rose more than 11% at one point, but ultimately reversed sharply to close down over 10%.
Editor / jayden