Haven Rush and the “Trump Trade” that crossed investors' minds after the mass shooting

According to market participants, traders initially flooded into evacuated assets and will re-evaluate the transactions most related to the candidacy of former President Donald Trump, who was shot at the rally.

“Nick Tweedale, chief market analyst at ATFX Global Markets, said, “There will definitely be protectionist trends and evacuating trends early in the morning in Asia.

“Gold will hit an all-time high, yen will be bought, dollars will also be bought, and funds will flow into government bonds.

However, according to initial market comments, the possibility that Mr. Trump will be elected will increase due to the current shooting incident, the focus will shift to securities most affected by Mr. Trump's policies, and there is a possibility that it will eventually become negative for national bonds.

Assets related to so-called Trump trades range from dollars to government bonds, private prisons, credit card companies, and health insurance company stocks. Investors see that Republican policies on tariffs, immigration, and budget deficits will result in a stronger dollar, higher bond yields, and a more favorable environment for these stock sectors.

Traders will also keep a close eye on market indicators showing expected volatility on Monday, such as the tariff-sensitive Chinese yuan.

Trump said he was shot in the right ear at a political rally held in Butler, Pennsylvania. His camp said in a statement that he was “fine” after the incident where he was raided from the stage. One rally participant was shot and killed, and the culprit was killed by the U.S. Secret Service.

The strategists had already anticipated an unstable development ahead of the November elections. This is because the Democratic Party is still struggling with the candidacy of President Joe Biden after his performance at the debate last month. Investors were also worried about the possibility that the election would be prolonged and that it might end in political violence.

However, there are few precedents for events like those in Pennsylvania. When President Ronald Reagan was shot 40 years ago, the stock market fell before closing early. According to data compiled by Bloomberg, the next day, 1981/3/31, the S&P 500 index rose 1% or more, and the benchmark 10-year bond yield fell 9 basis points to 13.13%.

According to Marco Papik, chief strategist at BCA Research based in California, bond investors should pay particular attention because there is a high possibility that this attack will support Mr. Trump's election.

“The bond market will notice at some point that President Trump's chances of winning the White House are higher than any of his rivals. “And I continue to believe that as his chances of winning increase, so should the probability that the bond market will revolt.

Capital.com's senior financial markets analyst Kyle Rodda said customers were flowing into bitcoin and gold after the shooting. Cryptocurrency rose after the news broke.

“This news indicates a shift in American political norms and is an emergency of greater political violence. “For the market, this means haven (shelter) deals, but it's biased towards more untraditional havens.