Trump vs Harris: Profiting from Dueling Market Shockwaves
As the 2024 election descends into its chaotic final stretch, President Donald Trump and Vice President Kamala Harris are offering voters radically divergent economic visions that promise to deliver seismic shockwaves across financial markets.
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For traders and investors looking to front-run these macro shocks and profit from the volatility, understanding the key market dislocations each candidate's policies could unleash is critical. Here's a breakdown of potential plays under "Trump-onomics" and "Harris-onomics":
Trump's Pro-Business Juggernaut
A second Trump term would likely embolden his corporate tax-cutting, regulation-slashing, fossil fuel-championing agenda:
Stocks: Extending Trump's corporate tax cuts below 21% would further inflate share prices and stock buybacks - creating momentum for deep cyclicals like energy producers, refiners, steel manufacturers and auto suppliers. However, megacap tech could get walloped by anti-monopoly breakup efforts.
Bonds: More debt-funded tax cuts may spook bond vigilantes. But a Republican Fed continuing to prioritize price stability over full employment could keep a lid on inflation expectations and yields. Corporate debt remains a potential sweet spot.
Commodities: Count on further commodity bull market legs in oil, gas and coal as Trump turbocharges "energy dominance" policies greenlighting pipelines, drilling and mining projects. However, green energy sources like solar, wind and EVs continue facing policy headwinds.
Currencies: Trump's enduring commitment to a stronger U.S. dollar risks reigniting global currency wars and "race to the bottom" devaluations as trade partners retaliate. Those betting on emerging market forex volatility could get richly rewarded.
Real Estate: Commercial real estate's secular bull run looks unstoppable as tax incentives spur development and the economic growth party rages on. Just be wary of residential markets facing labor squeezes if Trump's immigration crackdown continues.
Harris's Progressive Reboot
In contrast, a Harris presidency aimed at turbo-charging investments in clean energy, manufacturing and affordable housing could upturn many current market dynamics:
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Stocks: Brace for wild rotations as Harris's proposed tax hikes and stricter antitrust policies punish share buybacks. Meanwhile, her clean energy and healthcare spending splurge creates fresh pockets of innovation and growth opportunities. ESG funds and ETFs also get a booster shot.
Bonds: Harris's multi-trillion dollar agenda for climate investments, childcare, housing and more threatens to reignite inflationary psychology and bond yield spikes. Foreign treasury liquidations could exacerbate pressure.
Commodities: Oil faces a losing battle as Harris stringently enforces environmental regulations and emissions-reduction while fast-tracking the renewable energy transition. But a new commodity supercycle in strategic battery minerals like lithium, cobalt and rare earths gets supercharged.
Currencies: Say goodbye to King Dollar's reign as Harris prioritizes rebuilding multilateral alliances and trade pacts over unilateral currency dominance. The turmoil could create opportunities for currency investors positioned ahead of a new global FX hierarchy.
Real Estate: Overheating property bubbles could burst in Harris's crosshairs targeting affordable housing shortages, mortgage discrimination and restrictive zoning. But homebuilders and PropTech disruptors riding her proposed incentives present new frontier investing options.
Of course, no election victor gets a fully clear path to realizing their agenda in Washington's paradigm of checks and balances. And markets are often driven by underlying fundamentals versus political rhetoric.
But the sheer gulf between Trump's entrenched economic nationalism/corporatism and Harris's progressive overhaul ambitions virtually guarantees persistence volatility, factor rotations and disruptive instruments gaining traction across asset classes in the coming years.
For nimble traders who can stay one step ahead of these macro shocks and policy zigs and zags, the potential to profit by surfing these volatile cross-currents has rarely been greater. Those caught flat-footed however, risk getting swept away by the coming tsunami of market chaos headed our way.
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