US Election 2024 : Stock and Economic Comment

I’ll buyit. from a recent newsletter, that might have come across the Gumnut Family Office desk, recently?

“… According to the Election Betting Odds tracker which consolidates the odds from 5 major bookmakers, Trump now has a 53% chance of winning, and Harris has a 46.4% chance. As recently as 5 October Harris was the favourite.

What are the investment implications of a Trump win?

If the 2016 investment playbook is any guide, U.S smaller companies should perform well…lower taxes, less regulation and improved business sentiment etc.

The Russell 2000 Index of smaller companies … which looks like it wants to head higher, and we could see it exceeding its 2021 high. Investors, as we all know, are generally underweight smaller companies and I envisage many will look to increase their exposures in the months ahead.

Some months back, and when Biden was still in the race, we examined the impact of a likely Trump victory and stated that smaller companies would be a beneficiary.

We also saw a steepening of the U.S yield curve, as Trump’s economic policies are clearly inflationary, coupled with ever rising budget deficits and debt.

Neither Trump nor Harris have demonstrated any fiscal discipline, but Trump’s fiscal policies are arguably more stimulatory and inflationary.

In addition, we have the prospect of Trump’s much-loved tariffs… …”