Election Dynamics: The Economic Strategies of Harris and Trump

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As the 2024 U.S. presidential election approaches, the showdown between Harris and Trump has become a global focal point. The policy proposals of these two candidates will not only determine the future direction of the United States but also have profound impacts on global asset markets.

Harris's policy proposals lean towards directly subsidizing residents through fiscal measures, which could boost consumption and domestic demand in the short term.

For the asset markets, Harris's policies might support U.S. Treasury yields and the dollar, as her fiscal stimulus measures would require financing through debt issuance, increasing the supply of bonds and potentially pushing up bond yields. Meanwhile, the dollar could be supported by inflation expectations resulting from fiscal stimulus.

For the U.S. stock market, Harris's proposed tax hikes could negatively impact corporate profits, particularly for highly profitable and already high-priced tech companies. Additionally, tax increases on the wealthy and on capital gains could affect investors' risk appetite, thereby putting pressure on the stock market. However, her strong support for clean energy and infrastructure development could create investment opportunities in those sectors.

Trump's policies lean more towards stimulating business investment and economic growth through tax cuts and deregulation. This strategy could give a short-term boost to the stock market, especially in industries sensitive to tax cuts, such as finance and energy. The anticipated profit growth from tax cuts could drive the stock market higher.

However, Trump's trade policies, particularly tariff increases, could raise import costs and put pressure on industries dependent on imports. This could also provoke retaliation from trade partners, increasing market uncertainty.

In the commodities market, Trump's weak dollar policy could support prices of dollar-denominated commodities like gold and oil. On the other hand, Harris's support for clean energy could increase demand for materials related to new energy, thereby pushing up prices for those commodities.

In summary, the policy proposals of Harris and Trump will impact asset markets through different channels. Investors need to closely monitor policy changes and the market opportunities and risks that these changes may bring.