①Harris continues to make great strides in the polls, directly leading to Wall Street neglecting the "Trump trade"; ②Specific industries and stocks in the US stock market have been affected, but overall they are not as strong as the "Trump trade"; ③Analysts point out that the competition result is not absolute, and it is not the time to lock in positions yet.
Cailian News on August 28th (Editor Ma Lan) The future of Democratic presidential candidate Harris seems to be bright. According to the latest forecast, Harris has a nationwide support rate of 48.4%, leading Trump's 46.9%, and more and more states that were originally inclined towards the Republican Party are beginning to show a swing, further highlighting Harris's strength.
This has also led Wall Street to readjust their bets. Brian Mulberry, portfolio manager at Zacks Investment Management, said that the most likely result in the short term is increased volatility, leading to pricing anomalies, but this also provides active investors with the opportunity to rebalance election risk.
Goldman Sachs's index tracking election trading strategies shows that after Harris takes over from Biden, the performance of the Democratic Party starts to outperform the Republican Party. UBS directly suggests that a victory for Harris but with a divided Congress is the most likely election result.
This shift has directly led to the downfall of the "Trump trade", with many industries and companies deeply tied to Trump being repriced in the stock market. At the same time, Harris has also boosted new trades.
No absolute advantage has emerged
The showdown between Trump and Biden has driven the stocks of firearms manufacturers Sturm Ruger and Smith & Wesson Brands as well as private prison operator GEO to rise.
These companies' stock prices hit recent highs in July, right after the impressive television debate between Trump and Biden. However, the good times didn't last, and these stock prices have now fallen back to normal levels, with almost all the positive effects brought by Trump disappearing.
Matthew Tuttle, Chief Investment Officer and Founder of Tuttle Tactical Management, said that the president will not affect the overall market but will impact certain industries.
Compared to Trump, Harris' administration will clearly benefit renewable energy companies and their upstream and downstream sectors, including electric vehicle manufacturers and utilities, which is very different from Trump's heavy reliance on traditional energy industries.
Furthermore, Harris is more moderate on tariff and trade policies, which means that any industry heavily dependent on the Asian economy may experience relief and rebound. Wall Street believes that Harris' victory represents a minimal level of interference in business policy from the White House, which is the desired outcome for the industry.
However, the volatility caused by Harris is not as influential as the previous Trump administration's trade deals, mainly because Harris did not completely defeat Trump's absolute advantage. Therefore, more investors and strategists tend to wait and see rather than lock in positions in advance.
Eric Diton, President and Managing Director of Wealth Alliance, said that when Biden was running, the Trump administration made sense because Biden's support rate was steadily declining. But now with Harris in the picture, although her momentum is strong, the situation is still tense, making it an unpredictable competition.
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