After surviving an assassination attempt, market watchers predict that investors will initially favor traditional safe-haven assets and may lean towards trades closely tied to former President Donald Trump’s chances of winning the White House. Currencies will start trading at 5 a.m. in Sydney, with the US dollar, Japanese yen, Swiss franc, and gold expected to benefit from market volatility. Bitcoin also rose above $60,000 following the attack.
Futures contracts on the S&P 500 index and US Treasuries market will begin trading at 6 p.m. in New York, while cash trading of US bonds will start at 7 a.m. in London due to a holiday in Japan. Analysts anticipate increased volatility in both stock and bond markets on Monday, with a flight to safe havens like the Swiss franc and gold expected. Assets positively linked to the “Trump trade” include shares of energy firms, private prisons, credit-card companies, and health insurers.
While Trump’s support for looser fiscal policy and higher tariffs is seen as beneficial for the dollar and negative for Treasuries, assets like tech and renewable-energy stocks could suffer. Bitcoin may continue to rise due to its appeal as a hedge during political turmoil and Trump’s pro-cryptocurrency stance. The shooting incident has led to increased chances of Trump winning the election, according to PredictIt data.
Market strategists had already anticipated a volatile run-up to the election, with concerns over potential disputes or political violence. The incident in Pennsylvania, where Reagan was shot four decades ago, has put markets on high alert for potential copycat attacks. Bond investors should pay attention as Trump’s election chances are expected to increase, leading to concerns about the fiscal outlook. Yields surged after Biden’s poor debate performance, indicating the sensitivity of Treasuries to signs of Trump’s potential victory.
Overall, the market is bracing for potential fluctuations in response to the shooting incident and its implications for the upcoming election.