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特朗普遇刺后,全球市场加速“特朗普交易”

After Trump was attacked, the global market accelerated the "Trump trade".

Golden10 Data ·  Jul 15 07:01

The "Trump trade" will gain more momentum, and Wall Street is interpreting the future trend.

During a rally in Pennsylvania, Trump was hit in the ear, but his indomitable spirit on stage sparked enthusiasm from supporters and won sympathy. After the attack, Trump raised his fist, with blood flowing from his right ear, and the American flag fluttering in the background, which was widely acclaimed on social media and television. According to PredictIt's data, the possibility of Trump becoming president again increased after the attack. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Something seems likely to happen after the assassination attempt on Trump: Trump trade will get a bigger boost.

Since Biden performed poorly in last month's debate, a series of bets based on the expectation that Republicans will return to the White House and bring tax cuts, tariff increases, and relaxed supervision, have become more and more widespread in jeopardizing his re-election campaign.

If loose fiscal policy continues to push bond yields higher, the dollar will rise. Bitcoin rose above $60,000 after Trump was attacked, possibly reflecting his friendly stance on cryptocurrencies.

Mark McCormick, the head of global forex and emerging market strategy at Toronto-Dominion Bank said: 'This news does reinforce the narrative that Trump is the frontrunner. We still expect the USD to grind lower in H2 and into early 2025.'

However, the emergence of political violence may deepen concerns about the unstable situation in the United States, prompting investors to turn to safe-haven assets, which may cover up some market positioning that has already appeared before the election.

When investors seek temporary security, US Treasuries often rise, which may distort Trump trades in the bond market, which rely on betting that the yield curve will tilt, as people expect Trump's fiscal and trade policies to intensify inflationary pressures.

In addition, some investors may hope to take profits early or remain cautious about deepening crowded positions. Priya Misra, portfolio manager of TD Securities, said: 'Political risk is binary, hard to hedge, and comes with high uncertainty due to the intensity of the campaign. That adds to volatility. I think it further increases the likelihood of a Republican sweep, which could put steepening pressure on the curve.'

Although traders generally expect Trump's ordeal not to disrupt the trajectory of US stocks in the long run, recent price fluctuations may increase. Given the booming development of AI stocks and the risks posed by rising interest rates and political uncertainty, the market has begun to speculate that valuations are too strained. But investors have also been anticipating that bank, medical, and oil industry stocks will benefit from Trump's victory.

David Mazza, CEO of Roundhill Investments, said: 'This attack will intensify volatility.' He predicts that investors may seek temporary security in defensive stocks such as super-large market-cap companies. He said, 'This also provides support for stocks that perform well in the case of a steepening yield curve, especially financials.'

Michael Purves, CEO and founder of Tallbacken Capital Advisors, wrote in an email: 'If the market thinks Trump has a higher chance of winning than last Friday, we expect to see the kind of sell-off we saw after the end of the debate in the backend of the bond market.'

He believes that although bond traders have always believed that there will be at least two rate cuts in 2024, the significant increase in Trump's chances of winning may prompt the Fed to remain neutral for a longer period of time. 'Trump's established policy (at least for now) is more inflationary than Biden's policy,' he wrote, 'We think the Fed will want to accumulate as much ammunition as possible.'

Kyle Rodda, Senior Financial Market Analyst at Capital.com, said: 'This event marks a turning point in the normalcy of US politics.' He added that after the shooting, he saw customer funds flowing into bitcoin and gold. 'This means safe-haven trades, but more tilted to non-traditional ones.'

What will happen in the financial market on Monday?

Strategists have anticipated that the election will be full of variables, especially because Democrats are still struggling with Biden's candidacy. Investors have also continued to try to cope with the possibility of the election ending in a prolonged dispute or political violence.

But there are few precedents for events like those in Pennsylvania. When Reagan was shot 40 years ago, the US stock market fell before early closing. Bloomberg compiled data showing that the next day, on March 31, 1981, the S&P 500 rose over 1% and the benchmark 10-year Treasury yield fell 9 basis points to 13.13%.

Bloomberg strategist said that currency will be the first major market in Asia to react to the weekend shooting events on Monday. Additional volatility may occur, and liquidity may be particularly difficult to understand because of Japan's holiday.

Neil Jones, a financial institution forex salesman at TJM Europe, said:"The market will naturally be highly vigilant against any potential imitative repeat attacks. I expect the opening of the US dollar to be generally stronger. This is the role of the initial reflexive risk response and the rise in Trump's poll support rate."

Marko Papic, Chief Strategist at BCA Research Inc., California, believes that bond investors should pay special attention because this attack is likely to increase Trump's election chances and ultimately lead to concerns about fiscal prospects. "The bond market should realize at some point that Trump has a higher chance of winning the White House than any of his rivals," Papic wrote. "I still believe that as his chances of winning rise, the likelihood of a bond market riot should also rise."

The following are the views of other Wall Street insiders:

"Whatever happens on Monday morning, doing nothing may be the wisest strategy for stock investors, because generally people tend to overreact in the wrong direction. The market will find its balance and return to the most important things from an investment perspective, namely economic growth, currency and fiscal policy, and corporate profitability." said Oliver Pursche, Senior Vice President and Advisor at Wealthspire Advisors.

"Trump's assassination is bound to inject some uncertainty into the market. Given that the market is trading at historical highs, it is reasonable for the market to retreat from these levels, as more controversial and competitive elections seem more likely. We expect volatility to increase as Trump's chances of winning seem to be increasing." said Joe Gilbert, Senior Portfolio Manager at Integrity Asset Management.

"Everyone's quick reaction now is that this helps President Trump. After the debate, Biden's chances of winning plummeted, but Trump's chances did not increase. We should be able to price the impact of Trump's election on the market on Monday." said Marko Papic, Chief Strategist at BCA Research.

"From a market perspective, if Trump becomes the more obvious winner, then we should see the kind of steep bear market that emerged after the debate. As far as stocks are concerned, I don't think this will change the overall development trajectory, although some stocks will benefit from lower corporate taxes and reduced regulation." said Michael Purves, founder and CEO of Tallbacken Capital.

"The event over the weekend may intensify the volatility of the stock and bond markets on Monday. We expect to see a flight-to-safety sentiment such as the Swiss franc and gold. Due to the knee-jerk reaction, Bitcoin has responded positively to this news." said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Editor/Somer

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