Has Attack on Trump taken the stock market by storm? Who will be the winning team in the Trump market

Shooting incident further strengthens “Trump-related deals”It looks like they did. According to Polymarket, the probability that Mr. Trump will win the November election rose by about 10 points in the wake of the mass shooting and reached 70%. Meanwhile, the probability that rival Mr. Biden will win fell further and was 18%. The so-called “Trump deal” seems to gain even more momentum.

The “Trump Trade” is coming sooner than expected and in a less volatile formIt looks like they did. Based on the current presidential election trends,The most likely scenario is that Mr. Trump is elected president and the Republican Party controls both the upper and lower chambers. Trump is”Tariff hikes, income tax cuts, and stricter immigration policiesImplementing” is good for US earnings, but there is a possibility that inflation will be re-induced, and there is a high possibility that US bond yields and the dollar will remain high. According to Bloomberg,USD、Bitcoin、gold、US stocks (especially defensive stocks, traditional energy stocks)It is said that attention should be paid to these four major assets.

In the meantime, Tesla may benefit from Trump's election. According to market analysts, if Mr. Trump takes office as president,The possibility of imposing high tariffs on Chinese electric car manufacturersThere is, and itGood for TeslaThat might be it. Wedbush analyst Dan Ives said that if Trump is re-elected as president, it will have an overall negative impact on the electric vehicle industry, but even so, for Tesla,”Potential good materialIt was stated that it could become”.

Furthermore, Elon Musk, the CEO of Tesla, expressed support for Mr. Trump. On the 14th, Mr. Musk declared on X (old Twitter) that “I fully support President Trump and pray for a speedy recovery.”

Mr. Trump's victory in 2016 surpassed market expectations and caused drastic fluctuations in asset prices, and the market bet on “Trump deals” for 1-2 months after the victory, and after digesting predictions, transactions weakened and even reversed slightly.

At the time, what was the essence of the “Trump deal”expansionary fiscal policywithStrict trade policiesAlso, since the US inflation rate was expected to rise and the economic gap between the US and the US to widen, from 2016/11/12,Higher US Treasury Interest Rates、Strong US dollar、Strong US stockswas shown, and the Dow average led the rise in “Trump deals.” After predictions were digested in the first quarter of 2017,Market sentiment is cooling down、US stocks fell in MarchThen, US bond yields remained high and went up and down,US dollar indexhas declined.

After the 1st presidential candidate debate, market expectations for Mr. Trump's victory increased drastically, and the market began “Trump trading.” Currently, there is a possibility that room for fiscal expansion is limited due to the US government's high leverage and high interest rates, so the positive impact on US domestic demand, and even the US stock marketThere is a possibility that it will be weaker than last time。

The current US budget deficit is already7%It has also reached, and since Mr. Trump has stated that he wants to expand government investment in the future, high tariffs will be imposed as a means of securing revenue under income tax cuts, and therefore, Mr. Trump”Tariff hike+income tax reductionThere is a high possibility that the characteristic policy called” will continue. Education policies will be decentralized, and health care policies will curb fiscal spending by reducing costs due to competition.

(1) Decision of presidential and vice presidential candidates: Republican National Convention (7/15-18), Democratic National Convention (8/19-22)
(2) 2nd Candidate Debate: 9/10
(3) Presidential election: November 5

● Scenario 1:Based on the current presidential election trends,Trump is elected president, and the Republican Party controls both the upper and lower chambersThis scenario is most likely. By implementing “tariff hikes, income tax cuts, and strengthening strict immigration policies,” Trump is good for US earnings, but there is a possibility that it will induce inflation again, and there is a high possibility that US bond yields and the dollar will remain high. President Trump's industrial policy incentives will also further boost sectors such as traditional energy, utilities, and banking.

● Scenario 2: Trump is elected president+Congress splits. There is a high possibility that President Trump's income tax reduction policy will be blocked, but there is still a possibility that “tariff hike+strengthening strict immigration policies” will be implemented, there is an adjustment risk between US stocks and the US dollar, and there is limited room for the US Federal Reserve (Fed) to cut interest rates.

● Scenario 3: If Trump loses the electionThere is a high possibility that the Democratic Party will also struggle to unify the parliament. Asset classes may still run on current logic.