The "Trump trade" is suffering from a double whammy as Harris's approval ratings surge in U.S. election polls and expectations grow that the Federal Reserve may soon cut interest rates. Compared with the "Trump trade", the strategy of a Harris victory is currently receiving less attention. However, this situation may bring some far-reaching market effects.
Possible market reaction to Harris' victory:
Bullish outlook for Asian markets: Huo Ming Li, macro strategist at Lombard Odier Singapore Ltd, pointed out that if Harris wins, we expect bullish sentiment on Asian stocks to increase. Harris is unlikely to trigger large-scale inflation worldwide, which will help maintain the current core anti-inflationary drivers in the United States.
Policy uncertainty: Sharma-Ong, an analyst at abrdn Plc, believes that the specific impact of the "Harris trade" is still unclear. If there is a blue wave in Congress, the Democratic Party may push to restart the child tax credit policy during the epidemic and increase corporate taxes, which may squeeze corporate profits and pose a challenge to the market.
Room for optimism: Hebe Chen, an analyst at IG Markets in Melbourne, said that Harris's lead currently mainly comes from her not taking major actions. This state provides room for the growth of optimism, but the specific impact needs further observation.
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