The basics of the Trump trade have taken the form of support for rising US bond yields, gains in bank, health and energy stocks as well as Bitcoin and a stronger dollar
Some of the Trump trade in the bond market had already started to subside last week, as investors turned their attention back toward economic data and the Fed. (Photo: Bloomberg)
Investors have been amassing wagers on Donald Trump’s return to the White House for weeks, trimming holdings of long-term US bonds and buying Bitcoin, among other things. Now, they’re considering whether Joe Biden’s exit from the race boosts the odds of a Democrat victory — and how much they must recalibrate their bets.
Investors have been amassing wagers on Donald Trump’s return to the White House for weeks, trimming holdings of long-term US bonds and buying Bitcoin, among other things. Now, they’re considering whether Joe Biden’s exit from the race boosts the odds of a Democrat victory — and how much they must recalibrate their bets. Click here to connect with us on WhatsApp One thing seems certain after the president dropped his reelection bid: Though the announcement was widely expected as the 81-year-old faced pressure from allies, it injects a wild card into the campaign that will likely translate into volatility for markets.
“This means more uncertainty,” said Gene Munster, co-founder and managing partner at Deepwater Asset Management. “There was a lot of confidence about Trump winning, and markets won’t like this new uncertainty, along with the news cycle about who is in, who is out, and all those unknowns.”
As investors digest the latest news, the Trump trade — favoring sectors and strategies seen as benefiting from the Republican’s advocacy of looser fiscal policy, higher trade tariffs and weaker regulations — is likely to face headwinds.
