Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

With the support rate of Democratic presidential candidate and Vice President Harris consistently leading in opinion polls, it was once considered that former Republican President Trump, this chaotic US presidential election has prompted Wall Street to rush to adjust their bets.

Brian Mulberry, portfolio manager for Zacks Investment Management, said, 'In the short term, increased volatility appears to be the most predictable outcome. This may cause pricing anomalies and provide active fund managers with opportunities to rebalance risks.'

Since President Biden withdrew from the race on July 21st and supported Harris, the prospects for this Democratic presidential candidate have improved significantly. After the Democratic National Convention last week, Real Clear Politics polls showed Harris with a nationwide support rate of 48.4%, while Trump had 46.9%. When Biden withdrew from the race, Harris and Trump had support rates of 46.2% and 48.1% respectively.

This change in situation is reflected in the market. Goldman Sachs' index tracking trading strategies of both parties shows that Democratic performance began to outperform Republicans just before and after Biden withdrew from the race. Options positions indicate that although overall volatility is expected to remain below long-term average levels, traders are still hedging against volatility before and after Election Day.

Wall Street is also adjusting its views on the election results. Just last week, UBS's wealth management division stated that Harris winning in a divided Congress is the most likely outcome. Goldman Sachs has reconfigured components of its election-related trading strategies to reflect the lower likelihood of a Republican landslide, although the bank still considers it the most likely outcome. Earlier this month, JPMorgan stated that the presidential election is too close to call, after previously believing Trump was more likely to win.

'Trump trade' fizzles out

The failure of the "Trump trade" did not reflect in the broad indexes, but rather on specific industries and stocks.

Take private prison operators as an example. Before the disastrous debate between Biden and Trump on June 27th, their stock price was around $13.50, then it soared to $18 in mid-July, and now it has returned to around $13.50. Before the debate, their stock price was around $12, and it briefly rose to over $15 in mid-last month, but then fell back to around $13.50.$The GEO Group Inc (GEO.US)$The same goes for gun manufacturers. After the debates between Trump and Biden,$CoreCivic, Inc. (CXW.US)$their stock price was around $13.50.

After the debates between Trump and Biden,$Sturm Ruger (RGR.US)$And.$Smith & Wesson Brands (SWBI.US)$The stocks have all risen, rising throughout July, but then fell back to roughly the same level.

Matthew Tuttle, Chief Investment Officer and Founder of Tuttle Tactical Management, said, "The president won't affect the overall market, but they do affect various industries."

Meanwhile, the former president's social media company$Trump Media & Technology (DJT.US)$saw its stock price climb to over $40 in mid-July, but has now fallen to around $22.

In assets such as government bonds and global currencies that are sensitive to more widespread economic, financial, and geopolitical news, traders are no longer worried about trade wars and tariffs, which are most closely related to Trump's victory. The dollar is falling from its peak in June, and although part of the reason may be seen as favorable to the dollar, it also seems to be related to the Fed's interest rate cut.

Thierry Wizman, Global Head of Currency and Interest Rate Strategy at Macquarie Futures, said: "The likelihood of the Democratic Party winning the presidential election is increasing, leading to the unwinding of the 'Trump trade,' including the view of a stronger US dollar."

Trump also discussed promoting cryptos and expressed his desire to manufacture in the USA. However, after the initial excitement, the value of bitcoin seems to no longer be correlated with Trump's chances of winning.$Bitcoin (BTC.CC)$"The Harris trade" is on the rise. On the other hand, Harris' victory is expected to benefit a wide range of industries, including renewable energy companies and related manufacturers, electric vehicle manufacturers, and even utility companies.

However, the larger "Harris trade" poses the risk of a trade war due to Trump's tariffs and his more extreme trade rhetoric. Therefore, if Democrats continue to hold the White House, any industry that is heavily dependent on the Asian economy may see relief and rebound. Overall, Harris' victory also means minimal policy disruption, which is generally favored by investors.

There are some stocks that are expected to perform well due to the election: advertisers. Piper Sandler analyst Matt Farrell pointed out that the bank's recent survey showed higher-than-expected political advertising spending this year due to the sudden intensification of the campaign. This analyst believes that online advertising companies...

There are some stocks that are expected to perform well due to the election: advertisers. Piper Sandler analyst Matt Farrell pointed out that the bank's recent survey showed higher-than-expected political advertising spending this year due to the sudden intensification of the campaign. This analyst believes that online advertising companies...

There are some stocks that are expected to perform well due to the election: advertisers. Piper Sandler analyst Matt Farrell pointed out that the bank's recent survey showed higher-than-expected political advertising spending this year due to the sudden intensification of the campaign. This analyst believes that online advertising companies...$The Trade Desk (TTD.US)$is the "obvious beneficiary".

For any investor who wishes to trade the US presidential election, it is still too early to draw conclusions. As the summer turns into autumn, voter sentiment may change unpredictably. Therefore, strategists recommend that investors wait and see rather than lock in positions at this stage of the election cycle. Although Harris' support rate has risen rapidly in the polls, this competition is still considered too close to call and most market observers are waiting for a perfect outcome.

Eric Diton, President and Managing Director of Wealth Alliance, said, "We will not trade during the election because the competition is too fierce. It made sense to trade when Biden was running because his support rate did drop in the polls. But now Harris is gaining momentum and no one can say for sure."

Editor / jayden