This week, US presidential candidate Trump's first debate with Harris. The market speculates on the US presidential election results based on this. Furthermore, traders are closely watching the US inflation data due to be released on Wednesday to find clues about the scale of the Federal Reserve's interest rate cuts.
“Trump deal” vs. “Harris deal”
At 9:00 Beijing time, September 11th (Wednesday), the first debate between Trump and Harris will be held. The two sides are expected to clash fiercely on core issues such as economic performance and policy commitments. Trump's policy propositions focus on areas such as lowering corporate taxes, easing financial regulations, lowering interest rates, supporting traditional energy, and easing cryptocurrency regulations, while Harris favors continuing Biden's policies to increase government spending, raise corporate taxes, expand clean energy investments, and tighten AI regulations.
The outcome of the debate will not only affect the election situation, but will also have a market effect on related industries. Industry insiders expect Harris' victory to benefit renewable energy companies, electric vehicle manufacturers, consumer stocks, and large multinationals. Oil, gas, and traditional energy companies will be seen as likely beneficiaries of Trump's victory. Additionally, US stocks, dollars, gold, and cryptocurrency stocks may perform better if Trump wins. Current polls show that approval ratings between the two sides are close, and the performance of the debate may bias the balance to one side and become a key factor influencing the election results.
Follow the CPI data for August
After experiencing a sharp correction in the stock market last week, US stocks experienced a strong rebound this Monday. The 11 sectors of the S&P 500 index rose across the board. Technology and financial stocks showed particularly outstanding performance, all of which rose by more than 1.4%. Although US stocks had the worst September start in history last week, falling by more than 4%, investors reassessed the economic outlook after thinking calmly over the weekend. Market analysts believe that investors' concerns about the recession last week may have been excessive.
The US CPI data for August was released on Wednesday. The market predicted a 2.6% year-on-year increase in CPI, a sharp drop from 2.9% in the previous month. If the published data falls short of expectations, it may strengthen the market's expectations that the Federal Reserve will cut interest rates further at the September interest rate meeting. According to CME's US Federal Reserve's observation tool, the market currently expects the probability that the Fed will cut 25 basis points to 71%, while the probability of cutting interest rates by 50 basis points is 29%.
Federal Reserve officials are currently in the traditional period of silence before the September 17-18 interest rate meeting, so there will be no new guidelines. The change in pricing surrounding the initial rate cut may still cause some financial market fluctuations for the rest of the week. Investors need to pay close attention to the US CPI data for August released on Wednesday to further clarify the rate at which inflation in the economy is slowing.
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