Trump’s 2024 presidential bid a fresh wrinkle for markets

NEW YORK, Nov 16 (Reuters) – Former President Donald Trump’s entry into the 2024 presidential race on Tuesday confirmed the world’s “worst-kept secret” and created another shift for markets that some investors say is a low priority for now. remains

Trump, who has launched sustained attacks on the integrity of the US vote since his 2020 election defeat, announced his bid at his Mar-a-Lago estate in Florida, apparently aimed at preempting rivals. take the potential of Republicans.

His high-spirited televised announcement comes after a disappointing turnout in last week’s midterm congressional elections that many Republicans blame and as the party regains a majority in the 435-seat House of Representatives.

“I don’t think the announcement is as meaningful as people think – and with a weaker showing in the midterms it makes the nomination less likely,” said Joshua Crabb, head of Asia-Pacific communications at investment manager Robeco.

“Her influence is only down the road if she does well with the nomination.”

Politics has largely taken a back seat for Wall Street this year, with macroeconomic concerns and Federal Reserve policy acting as the main drivers of markets.

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Meanwhile, Trump’s announcement came as little surprise to investors, as the former president had telegraphed the possibility that he might run for another term.

“This has got to be the worst kept secret on the planet,” said Bill Stone, chief investment officer of Glenview Trust Company. “There are a lot of other things going on that are a high priority, although that can obviously change overnight.”

Of course, it is difficult to predict what kind of investment world the country’s future president will face.

It is likely to be very similar to the current one, or to the background that prevailed during the Trump era, which lasted from 2017 to 2021 and was characterized by lower inflation and a much less aggressive Fed.

Anthony Scaramucci, former White House communications director under Trump and founder of Skybridge Capital, said on the sidelines: “It’s the Holy Trinity of oiling the market — stimulus, deficit spending, low interest rates — easy money — and lack of regulation. .” a conference in Singapore.

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“But the flip side is (investors) also know that it creates what the market absolutely hates: political instability.”


Unlike Trump’s previous bid, the conflict within the Republican party has also worried some investors.

Shane Oliver, head of investment strategy at AMP in Sydney, said: “If anything, his decision to run may have fueled divisions among Republicans, many of whom blame him for his poor midterm election showing.” “This split may also reduce the chances of a market-friendly Republican administration winning the presidency in 2024, so some investors may actually see it as negative for the markets.”

The US stock market rallied more than 50% between Trump’s surprise 2016 election victory and his November 2020 defeat, despite flashpoints like the trade war with China and a severe but brief economic slowdown in that was with the COVID-19 pandemic. .

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The Republican president claimed credit for the rise, often tweeting about Wall Street’s performance.

Despite a recent rally, the S&P 500 (.SPX) is down about 16% for the year since Tuesday, after the Federal Reserve delivered a series of sizeable rate hikes in its bid to fight inflation.

Investors are also watching Trump-related stocks as a gauge on the former president’s prospects.

Shares of Digital World Acquisition Corp ( DWAC.O ), the spinoff company that wants to take Donald Trump’s social media giant public, fell 8.8 percent on Tuesday, while software developer Phunware Inc ( PHUN.O ), which was hired by Trump 2020. The re-election campaign to build a phone app was down 4.7 percent.

Both stocks rallied earlier this month on reports that Trump was considering a third bid for the White House.

Reporting by David Randall, additional reporting by Vidya Ranganathan and Tom Westbrook; Editing by Lincoln Feast

Our Standards: The Thomson Reuters Trust Principles.


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