Market styles are changing again! The 'Trump trade' is making a comeback, and the 'no landing economy' is factored into pricing.

As the US election approaches, traders are gradually pricing in election risks, and there are signs that the previously strong momentum of Harris is surpassed by Trump. The 'Trump trade' is regaining its previous popularity, boosting risk assets.

At the same time, overnight released US retail sales data for September exceeded expectations, showing strong economic momentum, increasing the possibility of 'no landing,' which dealt a blow to rate cut expectations, and the US bond market came under pressure.

Surge in retail data, will the US economy ultimately avoid a 'landing' recession?

Data released overnight showed that US retail sales in September increased by 0.4% month-on-month, higher than the expected 0.3% and the previous value of 0.1%; the year-on-year growth rate fell to 1.7%, the lowest level since January.

Some opinions point out that this retail data follows the previously strong CPI data and non-farm payroll report, further reinforcing the view that the 'economy is far from entering a recession'.

However, it is worth noting that the U.S. Census Bureau made the largest seasonal adjustment to this month's retail data compared to the same period in previous years, and if excluding the seasonal adjustment factors, retail sales in September actually decreased by 7.5% month-on-month.

September retail data boosts the likelihood of the economy avoiding a 'hard landing,' leading to a convergence of market expectations for a rate cut by the Federal Reserve.

After the data was released, futures contracts showed that traders had cut their bets on interest rate cuts in November and December by about 42 basis points.

The tide of the election has turned, 'Trump trade' returns.

In a recent research report released by Zhongzheng Sheng of Ping An Securities, Zhang Lu, and Fan Chengkai, they stated that from October 14th to 16th, Trump's advantage in key swing states expanded, leading to a sudden increase in election expectations.

Citigroup strategists Daniel Tobon and Dirk Willer wrote in a client report that the possibilities of tariffs/trade and fiscal expansion are two major concerns, both of which have an inflationary impact. The bank also stated that the chances of a "Harris trade" may be limited, as she is less likely to gain control of Congress.

Ping An Securities stated that the reopening of the capital markets under the "Trump trade" is mainly reflected in the positive performance of the US real estate and financial stocks, the continuous strengthening of the USD, and some pressure on the RMB exchange rates. Market observers also anticipate that energy stocks and cryptos will benefit once again.

According to Ping An Securities, the reasons behind the expanding advantage for Trump may be:

As tensions escalate in the Middle East, dissatisfaction or an increase in support for the Democratic Party's pro-Israel stance and increased military spending among voters.

Amid the impact of hurricanes on swing states, the Trump team has intensively launched political attacks.

Harris has recently performed poorly in television interviews, being criticized for lacking a clear stance on key issues such as immigration and the Middle East.

Due to worker strikes and a rebound in wage growth, concerns about inflation are resurfacing, with Trump being considered better able to control inflation.

Billionaire Stanley Druckenmiller stated in a media interview that in the past 12 days, the market seems to "strongly believe that Trump will win". The main indicators are:

Bank stocks have risen, accumulating an 8.5% increase over the past two weeks.

The stock price of Trump's media technology company (DJT) has soared since the end of September, with the market cap increasing by nearly 2 billion USD.

Bitcoin has risen by about 13% in the past week.

The US dollar briefly rose to a two-and-a-half-month high.

Overnight market trends

Overnight US stocks' main indices overall stable, with the S&P hitting a new intraday high before turning lower, the Nasdaq approaching erasing a 0.9% gain, and small-cap stocks falling for the first time in five days.

US bond yields collectively rising, with the 30-year US bond yield leading the way.

The usd continues to rise, rising for 12 days out of the past 14 trading days.

Furthermore, the sharp increase in gold and the US dollar, with gold price hitting a new historical high, approaching $2700.

After breaking above $68,000, bitcoin saw a slight decrease.