Trump's Heroic Image Highlighted After Assassination Attempt
Financial Markets Anticipate Trump 2.0
Stocks Related to Trump Surge Simultaneously
Bitcoin Soars After Spot ETF Approval and Sideways Movement
Long-Term Bond Yields Spike... Emerging Market Currencies Weaken
Following the assassination attempt on former President Trump, the financial markets are collectively observing a ‘Trump 2.0’ scenario. In the stock market, pro-Trump industries such as oil and firearms surged simultaneously, while environmentally friendly sectors showed a weak trend. The sharp rise in long-term bond yields, which spikes like a seizure whenever the probability of Trump’s election increases, reappeared, and emerging market currencies depreciated against the dollar. The price of Bitcoin, which former President Trump expressed support for, soared for the first time in a while.
Contrary to the expectation that a shooting attack on a prominent politician would highlight a preference for safe assets, analysis suggests that a ‘Trump trade’ is emerging, with assets related to Trump showing strength.
Trump’s Reelection Probability at 67%... Financial Markets Rally on Trump
According to the political betting site ‘PredictIt’ on the 15th (local time), the probability of former President Trump entering the White House this November was 67%, while President Joe Biden’s was lower at 27%. The Wall Street Journal (WSJ) reported, “Bets on Trump’s victory surged sharply after the presidential debate last month, which showed more stable performance than Biden, and after the shooting incident at a campaign event, his chances of winning rose again, reaching the highest level in at least 90 days.”
Accordingly, the stock market showed a unified ‘Trump rally.’ Shares of firearms manufacturer Smith & Wesson rose 11.38%, and ammunition maker Ammo surged 15.06%, both showing double-digit gains. The Republican Party, to which former President Trump belongs, emphasizes self-defense through personal gun ownership.
Banks such as Goldman Sachs (2.57%) and Bank of America (0.72%) also rose. Regional bank stocks like Western Alliance Bancorp (3.71%) jumped significantly. Since the Biden administration has been strengthening banks’ capital requirements, the market appears to interpret bank stocks as beneficiaries of a Trump victory.
Oil company stocks also showed strength. ExxonMobil and Chevron rose 1.71% and 1.57%, respectively. Former President Trump has stated his intention to triple oil drilling if reelected.
Trump’s media company, Trump Media & Technology Group (TMTG), surged 31.37%. TMTG’s affiliate, Rumble, saw its stock price jump 20.71%.
Biden-related stocks generally showed weakness. Solar-related stocks, representing green energy, were a prime example. The stock price of Sunrun, the largest solar company in the U.S., plunged 8.95%.
Electric Vehicle Weakness... Tesla Rises as ‘Trump Supporter’
Since former President Trump opposes Biden’s electric vehicle transition policy, electric vehicle companies such as Lucid (-15.06%) and Rivian (-3.37%) showed a unified weak trend, but Tesla (1.78%) was an exception that caught attention. After the shooting incident, Tesla CEO Elon Musk expressed strong support for former President Trump, and news emerged that he had donated a significant amount to Trump’s political action committee ‘America PAC’ the day before, leading to market analysis that Trump’s election could be a positive factor for Tesla.
Bitcoin Surges for the First Time in a While
Bitcoin surged about 7%. Although Gary Gensler, chairman of the Securities and Exchange Commission (SEC) appointed by President Biden, is known as a ‘crypto grim reaper’ due to his regulatory stance, former President Trump has positioned himself as a pro-cryptocurrency presidential candidate, so it is analyzed that bold regulatory reforms on cryptocurrencies would be emphasized if he is elected. Attention is also focused on what remarks former President Trump will make at the Bitcoin conference to be held in Nashville on the 27th.
Long-Term Bond Yield Spike Reappears
On this day, U.S. long-term bond yields also showed an upward trend. The 30-year Treasury yield rose 1.35% from the previous trading day to 4.459%. This reflects expectations that Trump’s fiscal and trade policies would increase inflationary pressures if he is elected.
Emerging market currencies showed weakness. The Mexican peso and South African rand fell 0.8% and 0.6%, respectively, against the dollar. Bloomberg reported, “If former President Trump is reelected, his protectionist economic policies could negatively impact emerging market currencies.”
Fredric Lepton, senior portfolio manager for global bonds and currencies at Neuberger Berman, said, “We may see more Trump premiums in the market going forward.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
