Trump-Victory Trades to Swell After Shooting, Investors Say
Market Reactions to Attempted Assassination at Trump Rally
Saturday’s shooting at former President Donald Trump’s campaign rally is expected to significantly impact financial markets and increase trades betting on his potential victory in the upcoming presidential election, investors said on Sunday.
The shooting incident occurred during a rally in Butler, Pennsylvania, where Trump was shot in the ear. Authorities are treating the incident as an assassination attempt. Despite the attack, Trump, with his face spattered with blood, signaled his resilience by pumping his fist moments afterward. His campaign quickly reassured the public that he was fine.
Financial Market Response
Prior to the shooting, markets had already responded positively to the prospect of a Trump presidency, pushing the dollar higher and positioning for a steeper U.S. Treasury yield curve. “Those trades could strengthen in the coming week,” noted Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments in Singapore.
The incident is the first shooting of a U.S. president or major party candidate since the 1981 assassination attempt on Republican President Ronald Reagan. This event could significantly influence the November 5 rematch between Republican Trump and President Joe Biden, which has been closely contested in opinion polls.
Nick Ferres, chief investment officer at Vantage Point Asset Management, drew parallels to the Reagan era, stating, “From memory, Reagan went up 22 points in the polls after his assassination attempt. The election is likely to be a landslide. This probably reduces uncertainty.”
Political and Economic Implications
World leaders and U.S. politicians condemned the shooting, with industry executives like Tesla’s Elon Musk declaring their support for Trump. Since a recent debate, President Biden has faced increasing doubts from donors, supporters, and fellow Democrats about his ability to beat Trump and manage the demands of the presidency.
Key issues such as immigration and the economy have been at the forefront of voters’ minds. According to Reuters/Ipsos polls, Trump is viewed as the better candidate for handling the economy, despite the Biden administration’s efforts to highlight a strong economy with slowing inflation and low unemployment.
Market analysts anticipate that a Trump administration would adopt a more hawkish trade policy, reduce regulations, and relax climate change regulations. Investors also expect an extension of corporate and personal tax cuts set to expire next year, raising concerns about rising budget deficits under Trump.
Market Trends and Investor Sentiment
Trump has expressed his intention not to re-appoint Federal Reserve Chair Jerome Powell if he wins, which could influence longer-end Treasury yields. The gap between 2-year and 30-year notes has narrowed, reflecting changing expectations about the Federal Reserve’s interest rate policies.
Stock prices have been on the rise, with the S&P 500 and Dow Jones Industrial Average hitting record highs. Analysts at Goldman Sachs noted that CEO confidence, consumer sentiment, and small business optimism have historically shifted more favorably in response to Republican victories.
“A Trump victory could boost the earnings outlooks for some firms even without substantial policy changes,” the analysts wrote. This sentiment was echoed by billionaire hedge fund manager Bill Ackman and Elon Musk, who both endorsed Trump following the shooting, with Musk calling him “tough” on his social media platform X.
Addressing False Information
In the wake of the incident, it’s crucial to address the misinformation spread on social media. An Italian sports journalist, Marco Violi, was falsely identified as the shooter, leading to widespread confusion. The FBI clarified that the actual suspect, identified as Thomas Matthew Crooks, was the “subject involved” in the shooting. Violi has announced plans to take legal action against those who falsely accused him.
This episode underscores the importance of verifying information and the rapid spread of misinformation on social media platforms. The truth about the “Italian Sports Journalist Falsely Identified as Trump Shooter on Social Media” reaffirms the necessity for accuracy and caution in public discourse.
As the investigation continues and the political landscape evolves, the impact of this incident will be closely monitored by both political analysts and financial markets.
