It is worth emphasising, however, that Trump's campaign was focused on attacking Joe Biden's policies and attitude, which is why the sudden change of the Democratic Party's candidate from Joe Biden to current Vice President Kamala Harris changed the US election race.
It is worth noting that Kamala Harris raised over $300 million in August following President Biden's announcement he would be stepping down, which is more than double the amount former President Trump’s operation raised in the same period. August was a stellar month for the Democrats with the campaign committee raising more than $540 million compared to Trump’s campaign committee of $268.5.
We are already seeing financial markets react to the first presidential debate between Kamala Harris and Donald Trump which took place on September 11, 2024 in Philadelphia, Pennsylvania. So what were the key points made?
11 September 2024 - Harris moves the dial for the democrats as UK economy suffers setback
Kamala Harris’s first election debate against Donald Trump was a triumph. She is emerging as the winner from last night’s debate, and the polls have moved in her favour. The pollster FiveThirtyEight predicts that Harris will win 47.1% of the vote, a gain of 2.7%, with Trump on 44.4%. After a dip in support over the summer, Harris has put her campaign back on track with her first debate performance.
However, there is still a long way to go before November’s election, and it’s worth noting that Hilary Clinton was considered the winner in all of her debates against Trump in 2016. However, back then he was an unknown quantity, whereas now Harris could push him on his time in office and the insurrection at Capitol Hill by his supporters after the 2020 election. She took opportunities to skewer Trump on some of his most extreme positions, while Trump seemed to miss opportunities to attack Harris.
Harris and her team have challenged Trump to another debate in October. He said that he will think about it. The Vice President will be hoping he accepts and she can pull off another performance like last night.
The market reaction also suggests there has been a shift in support towards Harris. The debate puts Harris’s agenda back in focus, which is good news for EV makers, renewable energy firms, and even cannabis stocks. Trump’s disappointing performance was reflected in the price of bitcoin. It fell more than 2% overnight. The crypto currency is linked to Trump because of his support for crypto trading and throughout this campaign he has said he wants to make the US the crypto trading capital of the world. Thus, expect more volatility for bitcoin and other crypto currencies and stocks for the rest of this election cycle.
US Stock futures are lower on Wednesday, the dollar is also weaker, especially against the yen, and USD/JPY fell 0.8%, after hawkish comments from a BOJ official raised the prospect of a Japanese rate hike later this week.
09 September 2024- The Harris/ Trump debate puts politics back in focus
It’s been a tumultuous summer for markets and for politics. Democratic candidate President Biden bowed out of the race, Vice President Kamala Harris took his place and Trump has seen his support get eroded in the key swing states, according to national polls. This Tuesday evening, we get the first election debate between Harris and Trump. Although Trump was considered the clear winner in the first debate, this was mostly because of Biden’s catastrophic performance, which ultimately cost him his candidacy. Trump’s performance was far from stellar, and this is something that Harris may try to exploit on Tuesday. Harris’s time as a prosecutor in California means she is a threat to Trump in this debate, and she could cut through some of his bluster, which may see her come out on top. While some argue that debates don’t correlate to election outcomes, Hilary Clinton won all her debate performances vs. Trump in 2016, Kamala Harris is still an unknown quantity to the US public. If she can put in a strong performance on Tuesday night, then it may help her campaign gain some upside momentum, which has slipped in recent weeks.
Which candidate is better for stock markets?
As the US election draws closer, the focus will be on which candidate is better for US financial markets. The future for the US Treasury market will be determined by what both candidates pledge to do about fiscal prudence, now that the US Budget deficit is nearly 6% of GDP. Analysis suggests that while both candidates’ policies would boost the budget deficit, Kamala Harris would be the most fiscally prudent, as Trump’s promised tax cuts would boost Treasury issuance. This could ultimately spook markets and may put upward pressure on bond yields. Rising bond yields did not stop a US stock market rally in recent years, however, with the focus on the prospects of a US recession in 2025, and a shift in stock market leadership, with non-tech sectors outperforming in recent months, a rising US budget deficit may complicate the outlook for the US stock market as we move towards the final months of the year. Thus, while it is difficult to make assumptions about which president will be better for US financial asset prices, we think that a division of power: with the White House and Congress controlled by different parties, will be the best long-term outcome for US equity markets.
Inflation data in the US is also worth watching this week. We do not think that it will stand in the way of a Fed rate cut next week, and the market is expecting a reading for headline CPI of 2.6% YoY for August, down from 2.9% in July, and for annual core price growth to remain at 3.2%. Shelter prices are expected to continue their mild downward trajectory, used car prices and consumer goods prices are also expected to have moderated last month. While a rate cut from the Fed in September is now fully priced in, the focus will shift to whether the Fed will turbo charge cuts in November and December, with two 50bp cuts currently priced in by the Fed Funds Futures market. A weaker than expected CPI reading on Wednesday could also boost prospects of a September 50bp rate cut, which may help the current leadership shift in the S&P 500. In the past month, Starbucks, Best Buy and Southwest Airlines have led the stock market higher, the latter has risen by more than 22%. In the last week, the sell off in big tech and especially AI chip makers has gathered steam. Nvidia closed down another 4% on Friday and the semiconductor index on the S&P 500 was the weakest performing sector on the S&P 500, falling 11%. Change is afoot in the US stock market, and this week could determine what comes next.
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