US Presidential Election: Macro & Cross-Assets Implications
2024 US Presidential Election – Down to the wire. The 2024 US Presidential race begun with Trump leading the polls, fuelled by strong support and a campaign centered on economic nationalism. Ho...
Chief Investment Office - Hong Kong24 Oct 2024
  • Equites: A Republican sweep would offer short-term gains ford tax-sensitive sectors through tax cuts, deregulation, and tariffs, benefiting industries like energy and manufacturing, although these gains may be offset by trade retaliation. A Democratic sweep would see an expansion of Biden's policies, supporting sectors such as healthcare, semiconductors, and clean energy.
  • Credit: A Republican sweep could boost corporate credit as business-friendly policies drive higher yields, offering opportunity in the 7-10Y duration. A Democratic sweep is expected to have neutral impact on credit, with corporate tax increases moderately affecting profits but not significantly impacting interest expense priorities.
  • Rates: A Republican sweep would likely steepen the yield curve, driven by fiscal looseness, inflationary concerns from tariffs, and pressure on the Fed to cut rates. A Democratic sweep would see yield curve relatively steeper and yields relatively lower as inflationary risk will be more contained.
  • FX: USD recovery expected to fade out after the US elections as Trump’s policy bias will undermine the dollar’s reserve status while Harris’s support for Fed’s independency will support ongoing rate cuts.
  • Gold: A Republican sweep would boost gold given Trump’s adversarial stance on geopolitics and looser fiscal stance, while a Democratic sweep would also see gold benefitting as Harris’ fiscal expansionary policy will grow, albeit to a lesser extent.
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2024 US Presidential Election – Down to the wire. The 2024 US Presidential race begun with Trump leading the polls, fuelled by strong support and a campaign centered on economic nationalism. However, the race took a significant turn when President Joe Biden stepped down from seeking re-election, allowing Vice President Kamala Harris to secure the Democratic nomination. Since then, Harris had gained significant momentum, with early polls showing her taking the lead over Trump.

However, in recent weeks, the political landscape took a dramatic shift as Trump regained momentum and now finds himself in the lead once again. With less than two weeks until the election, much can still change, adding to market volatility as investors weigh the implications of different outcomes. In this CIO Perspective, we highlight the macro and cross assets implications in the event of either a Democratic or Republican sweep.

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