The 2024 US presidential election, set to take place on November 5, 2024, is shaping up to be a highly consequential and closely watched event with potential significant impacts on financial markets. Here’s an overview of the election and its potential effects:
Election Overview
The race is primarily between Vice President Kamala Harris, the Democratic nominee, and former President Donald Trump, the Republican nominee
12. This election is notable for several reasons:
- It’s a rematch of sorts, with Trump seeking to reclaim the presidency he lost in 2020.
- Harris could potentially become the first woman and person of color to be elected US president.
- The election follows a tumultuous period in American politics, including unprecedented legal challenges facing Trump.
Polls are showing a tight race, with Harris holding a narrow lead in some national polls
4. However, the outcome will likely be decided in key battleground states like Pennsylvania, Michigan, and Wisconsin.
Election Day Logistics
- Polling stations will open between 7:00 am and 9:00 am local time on Tuesday, November 54.
- The first polls will close at 6:00 PM ET in parts of Indiana and Kentucky3.
- Key battleground states like Georgia will close polls at 7:00 PM ET3.
- Exit polls will be released at 5:00 PM ET4.
- Final results may not be known for several days, especially if the race is close4.
Potential Financial Market Effects
The outcome of the election could have significant impacts on financial markets:
Market Volatility
Historically, presidential elections tend to increase market volatility, especially in the weeks leading up to and immediately following the vote. This election, given its close nature, could amplify this effect.
Sector-Specific Impacts
Different sectors may be affected based on the candidates’ proposed policies:
- Healthcare: Harris’s support for expanding the Affordable Care Act could boost healthcare stocks, while Trump’s opposition might have the opposite effect.
- Energy: Trump’s pro-fossil fuel stance could benefit traditional energy companies, while Harris’s emphasis on clean energy could boost renewable energy stocks.
- Technology: The approach to tech regulation and antitrust issues could vary significantly between the candidates, affecting tech stocks.
Fiscal Policy
The election outcome will likely influence future fiscal policy decisions:
- Taxes: Harris may push for higher corporate taxes, which could impact corporate earnings and stock valuations.
- Government Spending: Different priorities in infrastructure spending or social programs could affect various sectors of the economy.
Trade Policy
Trump’s more protectionist stance on trade could lead to increased tensions with trading partners, potentially affecting global trade-sensitive stocks and currencies. Harris might pursue a more multilateral approach.
Dollar and Bond Markets
- The US dollar could see significant movements based on the election outcome and its implications for future economic policy.
- Bond yields may fluctuate as investors assess the likelihood of different fiscal and monetary policy scenarios under each potential administration.
It’s important to note that markets often price in expected outcomes in advance, so the actual market reaction will depend on how the results compare to pre-election expectations. Additionally, the composition of Congress will also play a crucial role in determining the ability of the next president to implement their agenda, further influencing market reactions.Investors and market participants will be closely watching not just the presidential race, but also key Senate and House contests that could determine control of Congress, as this will have significant implications for future policy-making and its effects on financial markets.
