With US elections just around the corner, investors and market watchers are gearing up for potential market impacts. The policies and promises from both candidates—Donald Trump and Kamala Harris—aren’t just sparking debate at home. They’re sending waves through global markets, influencing everything from the US dollar to commodities and equities worldwide. Let’s dive into their platforms to see which assets could see the biggest moves in the coming months.
Some of the key Trump’s proposals
Make America the dominant energy producer in the world
Trump’s pledge to ramp up US energy production by cutting restrictions could drive global energy prices lower. This might put downward pressure on commodities like crude oil (USOUSD). However, US energy companies (e.g., XOM) could see a boost from deregulation and higher production opportunities.
Make Trump tax cuts permanent and no tax on tips
In a recent speech at the Economic Club, Trump announced plans to cut the corporate tax rate from 21% to 15% for companies manufacturing in the US. This could benefit stocks in the manufacturing and industrial sectors (CSX, F). Other tax proposals, like eliminating taxes on tips and Social Security, could boost disposable income, potentially lifting consumer spending and retail stocks (AMZN, WMT).
Seal the border and stop the migrant invasion
With stricter immigration policies, such as large-scale deportations and border enforcement, companies from agriculture and construction sectors (e.g., CAT) that rely on immigrant labor may feel the impact. Reduced labor could drive wages up, potentially impacting company profitability and adding stock volatility.
Secure strategic independence from China
Trump’s stance on curbing US-China investments and limiting imports may affect companies that rely on Chinese manufacturing or exports. This could also impact Chinese stock indices (CN50) and key Chinese companies (BABA, BIDU), while likely increasing volatility for USDCNH traders.
Champion innovation
The Republican platform’s support for cryptocurrency and AI development could benefit digital assets like Bitcoin (BTCUSD) and AI-focused stocks (NVDA) if Trump is elected.
Keep the US dollar as the world’s reserve currency
Policies aimed at reinforcing the USD’s reserve status could further support USD performance, drawing more investor interest.
Some of the key Harris’ proposals
Support healthcare and big pharma (e.g., lowering drug prices)
Harris’s initiatives to lower drug prices and cap insulin costs could impact healthcare stocks (e.g., UNH, PFE), introducing some volatility.
Increase affordable housing and make infrastructure investments
Harris plans to add 3 million new homes and cap rent increases, which may help stabilize housing markets. This could affect real estate investment trusts (REITs) and real estate companies, benefiting construction and infrastructure-related firms (e.g., AMT, UPS).
Support clean energy and wildfire resilience investments
Harris’s emphasis on clean energy and climate resilience could boost sectors like renewables, water management, and construction. This may positively impact stocks in renewable energy and EV sectors (TSLA) and negatively affect the price of US oil.
Provide corporate accountability (targeting price gouging)
Harris’s push against price gouging, especially in essential sectors, may increase regulation and competition, potentially creating volatility for large corporations (AAPL, NFLX, AMZN, META, GOOG) and broader indices like the S&P500 and Nasdaq.
Doto’s picks to watch post-election
If Donald Trump wins, keep an eye on the USDCNH chart—it’s bound to turn heads. The pair could strengthen as the USD gains and the yuan weakens, pushing it toward its July and October 2023 highs around 7.27-7.36 on the weekly chart. This is the level where we might see intervention from the People’s Bank of China to prop up the economy amid tariffs, potentially weakening the yuan further. So, don’t be surprised if we see the pair heading toward 7.5 or higher.
In a Harris victory, oil prices and oil-producing companies could see some pressure due to her clean energy policies and measures against price gouging. Despite recent geopolitical tensions, oil has struggled near a support zone of $64.00-66.70. A break below $64 could signal a stronger downtrend with support at $60.
Bottom line
The US elections are always pivotal, generating global market volatility. Remember, if you’re trading stocks, crypto, oil, or currencies, practice solid risk management and avoid excessive risk. Doto will help keep you on steady ground through the election-driven turbulence.
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