A detailed analysis of the 2024 U.S. presidential debate, focusing on economic issues and investment opportunities. Learn how the debate affects financial markets and explore key investment strategies.
Overview of the Presidential Debate
On July 2, 2024, the first TV debate between the U.S. presidential candidates was held. The debate covered various topics, including the economy, society, and trade policy, but overall, it merely reiterated the candidates’ existing positions. President Biden’s occasional lack of focus highlighted concerns about his age, while Trump confidently presented his arguments, leading to a surge in bets on Trump’s victory right after the debate.
Major Economic Issues from the Debate
The major economic issues raised during the presidential debate 2024 can be summarized into two main concerns:
- Inflationary Pressures
- Trump proposed a plan to impose a 10% tariff on all imported goods and implement strict anti-immigration policies, which could increase wage pressures. These factors can exert upward pressure on inflation.
- Concerns Over Sustained Fiscal Deficits
- Trump also aimed to attract votes with promises of tax cuts and increased spending. With the debt ceiling and the expiration of the 2017 Tax Cuts and Jobs Act (TCJA) approaching next year, concerns over sustained fiscal deficits could lead to increased volatility in interest rates and the stock market.
Financial Market Reactions
The financial market reactions after the 2024 presidential debate reflected Trump’s perceived advantage. The S&P 500 futures and interest rates steadily rose, suggesting that Trump’s policies were viewed positively by the market.
Particularly, Trump’s stance on deregulation positively impacted the financial sector. Historically, financial stocks have performed well during election periods, and the current fundamentals are also strong. Large banks recently passed the Federal Reserve’s stress tests, and earnings estimates for the second quarter are being revised upwards.
Investment Opportunities in the Financial Sector
Even amidst the election noise, there are investment opportunities. The financial sector stands out due to Trump’s deregulation policies and positive fundamentals. It is advisable to consider investments in large bank ETFs (KBE.US) and financial service companies, especially ahead of the shopping season, when consumer sentiment may recover.
Analysis of Major Financial Stocks
The following table summarizes the second-quarter earnings estimates and stock volatility of large bank stocks and financial service companies.
| Company Name | Subsector | Market Cap (Million USD) | Stock 3M% | 2Q24 EPS Estimate 3M% | 12MF EPS Estimate 3M% |
|---|---|---|---|---|---|
| JP Morgan | Banking | 580,823 | 1.0 | 14.2 | 4.0 |
| Discover Financial Services | Financial Services | 32,780 | -0.2 | 11.4 | 0.5 |
| Northern Trust | Financial Services | 17,181 | -5.6 | 9.9 | 9.9 |
| T. Rowe Price Group | Financial Services | 25,748 | -5.4 | 9.5 | 12.3 |
| Fidelity National | Financial Services | 41,919 | 1.6 | 7.7 | 8.8 |
| Wells Fargo | Banking | 207,052 | 2.5 | 7.3 | 8.7 |
| Goldman Sachs | Financial Services | 145,856 | 8.3 | 5.0 | 11.8 |
| Morgan Stanley | Financial Services | 158,931 | 3.2 | 4.7 | 9.7 |
| CME Group | Financial Services | 70,788 | -8.7 | 4.5 | 2.4 |
| BNY Mellon | Financial Services | 44,786 | 3.9 | 4.3 | 7.4 |
These stocks are expected to continue growing post-election, providing stable returns.
Conclusion
The 2024 presidential debate has drawn attention to Trump’s advantage and the economic issues important to investors. The potential for inflationary pressures and sustained fiscal deficits can significantly impact the financial market. However, amidst this noise, the financial sector presents investment opportunities. Large bank ETFs and financial service companies are worth noting for their potential to offer stable returns even in volatile times. As election-related events unfold, they may present new investment opportunities.
My Opinion
As the 2024 presidential election approaches, market volatility is expected to increase. However, this also presents new investment opportunities. Stay informed on key election dates and economic issues, and strategically approach investments in sectors like financial services, consumer goods, and technology stocks. Doing so can help build a portfolio that anticipates stable returns even amidst election noise. Finally, please note that the above information is for reference purposes only, and all investment decisions and responsibilities lie with the individual.
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