Election Tracker

1. Goldman Sachs' Republican outperform versus underperform basket is currently outperforming the Democratic outperform versus underperform basket.

2. The trading team at Goldman Sachs, including Faris Mourad, anticipates significant volatility in a basket of stocks closely tied to Republican policies if Trump wins the election.
- "Since this summer, the sensitivity of our Republican policy outperform basket to election events suggests that if Trump wins the presidential election and his PredictIt win probability rises to 100%, these stocks could rise by 8%," they stated.

4. The tight race in the election has prompted corporate treasury professionals to increase their foreign exchange hedging activities.
- Data compiled by Bloomberg shows that the one-month implied volatility rate for the euro is currently near its highest level in about a year, while the same metric for the Mexican peso is at its highest level since around 2020.
- The price of one-month option contracts on the Bloomberg Dollar Spot Index is currently roughly at its highest level since the beginning of 2023.
- Harris and Trump have vastly different views on trade, government spending, and the economy, and companies operating in different countries face the possibility of multiple election outcomes, including a landslide victory for either the Republicans or the Democrats.
- These scenarios could all lead to significant volatility in the foreign exchange market, as was the case when Trump was first elected eight years ago.

Chinese Automobiles:
1. Trump, while in Detroit, pledged to invoke the six-year renegotiation clause in the United States-Mexico-Canada Agreement (USMCA) to impose "any necessary tariffs" to ensure that China does not sell cars produced in Mexico to the United States.
- Trump also promised to ban self-driving cars produced in China from operating on U.S. roads.

Federal Reserve:
1. Trump's senior economic advisor criticized the Federal Reserve's decision to cut interest rates as a misjudgment as the presidential election approached.
- Scott Bessent, CEO of hedge fund Key Square Group, criticized the Federal Reserve during an interview with Bloomberg News on Friday for cutting interest rates last month, especially the aggressive 50 basis point cut.
- Bessent emphasized that he was not speaking on behalf of the Trump campaign and reiterated his view that a so-called "shadow chairman" could be appointed six months before the end of Powell's term.