Trump’s debate win boosts S&P 500 A After this this happened.

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As Biden lost ground before the debate even began, financial markets registered a clear sign that investors view Trump’s victory as at least a good thing. S&P 500 futures rose 0.2% as Biden’s momentum slowed and continued a single-day gain. Inflation came in at the lowest record since late 2020, raising hopes of a Federal Reserve rate cut in September. Both the S&P 500 and Nasdaq hit record highs before investors had second thoughts. By Friday afternoon, markets turned negative and ended at the lowest level for the date.

Biden came into Thursday’s debate facing an uphill battle and was quickly hit on the back by a mostly self-inflicted knockout punch. Now a lot of doubts are hanging over his ability to remain the Democratic nominee. Trump is beginning to appear to be an overwhelming favorite to reclaim the White House, and prospects are emerging that he will have a Republican Congress to carry out his program.

Trump successfully divided business teams

But the consequences of one-party rule are usually mixed. Wall Boulevard began the date encouraged by the fact that a deep corporate tax cut is now much more likely than the tax increases Biden aims to enact. However, Treasury yields edged higher on Friday morning as Wall Street began probing big fund losses. Some sectors, such as financials and oil and fuel stocks, brightened on the prospects of lighter regulations. Comerica Regional banks were strongly led by CMA (CMA), which rose 6.7%.

Although Trump’s dismissal of Biden’s inflation relief business as “every new scam” perhaps helps explain why. first sun (FSLR) dived 9.8% on Friday. Trump’s long history of subverting affordable offering businesses helped sink managed-care stocks. oscar bet (OSCR), which slipped 10.4%. Health facility stocks that benefited from Democrats’ pressure to expand Medicaid also suffered losses. Guiding Principles Healthcare 3.8% off (THC) and HCA Healthcare (HCA) sick 6.4%.

However, some fitness stocks may outperform under Trump. humana (HUM) shares rose 2.9% as RBC Capital wrote in a note Friday that Medicare benefit carriers could get good relief in the Trump administration.

Trump’s rise, Biden’s forecast dive into market

Prediction markets betting on political outcomes took off immediately and dramatically, as Biden struggled to find the right terms. Biden’s chances of winning another term dropped from about 48% to 31% on PredictIt. The chances of his party’s nomination dropped from 85% to 67%.

Trump won, but Biden did not lose. PredictIt now gives Trump a 59% chance of winning a second term, up from 53% before the controversy.

PolyMarket now projects a 52% probability of a GOP sweep, up from 46% before Thursday’s debate.

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Biden replacement?

Political commentators essentially took a stab at Biden’s prospects on Thursday evening, temporarily reaching a consensus that it would be futile for him to remain in the race. Before the controversy, political forecaster Nate Silver had already given Trump a 66% chance of winning the Electoral College. As Silver sees it, the important thing for Democrats is to win the battleground states of Pennsylvania, Michigan and Wisconsin.

That calculus could prepare a proposal to replace Biden with a Midwest governor, like Michigan’s Gretchen Whitmer, though she is little known and untested nationally. Betting markets see California Governor Gavin Newsom as a possible alternative to Biden, followed by Vice President Kamala Harris.

Since the first debate came oddly early, if Biden were to drop out, it would theoretically be a month for Democrats to rally around an untested candidate at the party convention in Chicago from August 19 to 22. Alternatively, selecting one option may be divisive. Disagreement among progressives over how Hillary Rodham Clinton defeated Bernie Sanders for the 2016 nomination helped elect Trump within months.

The biggest reason Biden may have remained in the race so far was the disagreement over his obvious choice to shoot Park.

additional trump tax cuts

The single-day gain in S&P 500 futures indicates at least a slight appetite for a Trump presidency among marketers. If Trump wins and Republicans gain control of Congress, “the 2017 tax cuts would likely be extended with further reductions in corporate tax rates,” UBS World Wealth Control strategists wrote in a June 24 research. ” Under the less likely Democratic sweep, corporate tax rates would go higher.

Markets may be pleased with lower taxes and lighter legislation this year, UBS wrote, “which may be partially offset by concerns about the cost and inflationary effects of higher tariffs and trade wars.”

Fed cools inflation charges, raises charge-snip hopes

S&P 500

LPL financial technical strategist Adam Turnquist said in a May 31 study that the looming prospects of a Trump election appear to be correlated with S&P 500 gains. Meanwhile, Biden’s declining prospects were negatively correlated with the performance of the S&P 500 since February. ,

Alternatively, there is some other conceivable reason for Turnquist’s comment. The strong activity expansion, which would likely support Democratic prospects, has only raised concerns that the Federal Reserve will extend interest rate cuts further. Weak financial data past due has raised hopes of a September rate cut and helped the accumulation market. However, the notion that households are cutting back on spending due to extreme stress is hardly good information for Biden.

So, the reaction of the S&P 500 futures to Trump’s debate win gave a clear signal, but the market still likes Trump, at least this month. However, the response to the unfettered implementation of Trump’s policies will depend greatly on the environment of the economic system.

Perceived effect of piling on arousal

In a June 20 webcast, geopolitical strategist Matt Gertken of BCA Analysis said that additional Trump tax cuts would help counteract a potential financial meltdown. But while the economic system remains resilient, “then you’re piling stimulus on top of it, that’s where bond markets will react very negatively.”

The S&P 500 rose 0.1% on Thursday, just 0.1% shy of its all-time top set on June 18, before slipping 0.4% on Friday. The S&P 500 has risen 62% since Biden’s election in November 2020. By comparison, the S&P 500 rose 57.5% in the four years following Trump’s election in November 2016.

You should definitely read IBD’s The Weighty Image column ahead of every buy and sell date to stay untouched by the common accumulation market pattern and how it impacts your buying and selling selections.

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