In the sun two weeks from Election Day in the USA, what dominates Wall Street is uncertainty and volatilityas the outcome electoral still seems “in the balance” for the US press. According to the latest poll conducted by the Washington Post, it is still neck and neck between Donald Trump and Kamala Harris, while for some experts the market is already pricing in a second Trump victory.
The Trump-Harris head-to-head
The latest survey of Washington Post-Schar School notes that, between the two candidates, there would be one minimal and non-decisive difference – in any case lower than the margin of error of the polls – and therefore Trump and Harris would find themselves on a substantially equal footing. But they are there seven relevant states in the balanceand the difference will be a few thousand more votes.
Donald Trump would be ahead in Arizona (a state with 11 votes), with an advantage of 49% against the 46% of the Democratic candidate and in North Carolina (16 votes) with a percentage of 50% against the opponent’s 47%. For its part, Kamala Harris would have already conquered the Georgia (16 votes) with 51% of the votes against 47% of the Republican rival, the Wisconsin (10 votes) with 50% against 47%, the Michigan (15 votes) and the Pennsylvania (19 votes), both with 49% against 47%.
Totally in the balance Nevadawhere there is one substantial equality.
Some already consider Trump to be a winner
Wall Street’s exploits reach new historic highs and the appreciation of the dollar, according to the Unicredit expertsalready suggest one Trump’s victory.
“What has begun to be discounted is the so-called Trump Trade – we read in today’s Morning meeting – or the possibility that the next occupant of the White House will be the tycoon who already sat in the most important seat in the world. Trump has indeed accumulated some advantage in the polls compared to Kamala Harris, although according to the Washington Post neither candidate has a significant advantage in key states.”
According to Unicredit, “the market does not attribute neither one nor the other has the ‘virtue’ of reducing the debt public but the Republican representative is indicated as the one who would make it rise the most”.
An opinion shared by analysts at Schrodersaccording to which the two candidates, “They don’t have much room to maneuver from a political point of view, also because the fiscal constraints are quite substantial. Protectionism, if implemented by Trump, would be a tax on consumers and massively regressive. Whoever is elected will still let monetary policy do its job.”
But what are the programs of the two candidates?
The program of Trump it is well known. The tycoon is aiming for greater extension of the deficit federal to finance the economic recovery, on a massive scale tax cuts on companies at least 15% (now it is at 23%) and on politics protectionist to the bitter end.
The program of Harris instead it draws inspiration from Biden’s, making some “important additions” and focusing on “opportunity economy” to support low-income families and SMEs.
“It’s a combination of welfare measures in support of the lower middle class, interventions for middle class and small businesses aimed at increasing productivity and corrective and redistributive policies to limit the excesses of power of large companies”, explains Moneyfarm, including the measures to support families (for children, for income, for housing and so on), the creation of at least 3 million housing unitsincentives in favor of birth new SMEs and startups (at least 25 million within the first two years), a “moderately” protectionist policy (Biden’s electric cars) and, like Trump, a debt extension to finance a program worth 700 billion a year, in addition to theincrease in Corporate taxation.
How these programs will impact
Looking at the market equityIG Market experts report that, a Trump’s second termcould favor:
- the big names in traditional energy such as Exxon Mobil, Chevron, Baker Hughes
- the actions of defensesuch as Lockheed Martin, General Dynamics, RTX Corporation and Northrop Grumman
- the big ones investment banks such as JP Morgan, Bank of America, Goldman Sachs
- the car like GM and Ford
- the big ones technologies concentrated on the domestic market (Oracle and Cisco), not those exposed abroad like Apple and Nvidia.
A Harris’ victoryinstead, would benefit
- the clean energy (NextEra, First Solar, Enphase Energy, Sunrun)
- the electric vehicles (Lucid, Rivian)
- the titles healthcare (UnitedHealth, CVS Health, Centene Corporation)
- the infrastructure (Caterpillar, Vulcan Materials, Nucor)
- tech stocks linked toartificial intelligence (Nvidia and Palantir Tech).
As for the dollaraccording to JP Morgan AM experts, the trajectory “follows the relative probability of a Republican victory” and “tends to strengthen closer to the elections,” and then declines in the post-election period when “the market enters a phase of global risk appetite” and “there is greater clarity on the direction of policies”. Thereafter, the direction will depend on “the ability of the new administration to implement its agenda.”
