Trump’s 2024 presidential bid a fresh wrinkle for markets

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NEW YORK, Nov 16 (Reuters) – Former President Donald Trump’s entry into the 2024 presidential race on Tuesday confirmed the world’s “worst kept secret” and created another variable for markets that some investors say is a low priority for now.

Trump, who has made relentless attacks on the integrity of American voting since his 2020 election defeat, announced his bid for his Mar-a-Lago estate in Florida, seemingly with the goal of getting ahead of potential Republican rivals.

His cheery televised announcement comes on the heels of a disappointing result in last week’s midterm congressional elections, which many Republicans blame him for, and as the party approached a majority in the 435-seat House of Representatives.

“I don’t think the announcement means as much as people thought – and with a weaker mid-term reading it reduces the chances of a nomination,” said Joshua Crabb, head of Asia-Pacific Equities at asset manager Robeco.

“The impact is only on the track if he gets good traction with the nomination.”

Politics has largely left Wall Street behind this year, with macroeconomic concerns and Federal Reserve policy being the main drivers for markets.

Trump’s announcement, meanwhile, came as no surprise to investors, as the former president had telegraphed the possibility that he could rejoin for some time.

“This has got to be the world’s worst kept secret,” said Bill Stone, chief investment officer of the Glenview Trust Company. “There are a lot of other things going on that are a higher priority, although of course that could change overnight.”

Of course, it is difficult to predict what kind of investment landscape the country’s next president will face.

Chances are, it’s unlikely to bear much resemblance to today, or to the background that dominated Trump’s reign, which ran from 2017 to 2021 and was notable for relatively low inflation and a much less aggressive Fed.

“He is the holy trinity of market lubrication – stimulus, through deficit spending, low interest rates – easy money – and a lack of regulation,” said Anthony Scaramucci, former Trump White House communications director and founder of Skybridge Capital. from a conference in Singapore.

“But the flip side is (investors) also know he creates what markets absolutely hate: political instability.”

WE DIVIDE PAIN

Unlike during Trump’s previous bid, the dissension within the Republican party also worried some investors.

“His decision to run may deepen divisions among Republicans, with many blaming him for their poor midterm results,” said Shane Oliver, head of investment strategy at AMP in Sydney. “These divisions may even reduce the likelihood of a more market-friendly Republican administration winning the presidency in 2024, so some investors may even see it as a negative for markets.”

The US stock market rose more than 50% between Trump’s surprise victory in the 2016 election and his defeat in November 2020, despite foci for volatility such as the trade war with China and the severe but short-lived economic slowdown associated with the COVID-19 pandemic. 19 pandemic .

The Republican president has taken credit for the turnout, often tweeting about Wall Street’s performance.

Despite a recent rally, the S&P 500 (.SPX) is down about 16% for the year as of Tuesday, after the Federal Reserve delivered a string of massive rate hikes in its bid to fight inflation.

Investors also look to Trump-linked stocks as a gauge of the former president’s prospects.

Shares of Digital World Acquisition Corp (DWAC.O), the blank check company that wants to take Donald Trump’s social media venture public, fell 8.8% on Tuesday, while software developer Phunware Inc (PHUN.O), which was hired by Trump’s 2020 reelection campaign to build a phone app fell 4.7%.

Both stocks rose earlier this month on reports that Trump was considering a third bid for the White House.

Reporting by David Randall, additional reporting by Vidya Ranganathan and Tom Westbrook; Edited by Lincoln Feast

Our Standards: The Thomson Reuters Principles of Trust.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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