How will the markets react to a Trump comeback in 2024?

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How will the markets react to a Trump comeback in 2024?

Donald Trump, the former president who was impeached twice and banned from social media platforms, is gearing up for another run for the White House in 2024. He has already announced his intention to challenge the incumbent Joe Biden, who defeated him in the 2020 election by a margin of more than 7 million votes. Trump has also claimed, without evidence, that the 2020 election was rigged and stolen from him.

But how will the financial markets react to the possibility of a Trump comeback in 2024? Will they welcome his pro-business policies and tax cuts, or fear his unpredictability and trade wars? Here are some of the factors that could influence the market sentiment in the run-up to the next presidential election.


The economy and the pandemic

One of the main drivers of the market performance is the state of the economy and the recovery from the Covid-19 pandemic. Biden has overseen a massive stimulus package of $1.9 trillion, which has boosted consumer spending, job creation, and vaccination rates. The U.S. economy grew by 6.4% in the first quarter of 2021, and is expected to expand by 7% for the whole year, according to the International Monetary Fund (IMF).

Trump, on the other hand, has criticized Biden’s handling of the pandemic and the economy, and has vowed to reverse his policies if he returns to power. He has also blamed China for the outbreak of the virus, and has threatened to impose more tariffs and sanctions on the Asian giant. Trump’s approach to the pandemic and the economy could undermine the recovery and increase the uncertainty and volatility in the markets.


The tax and regulatory environment

Another factor that could affect the market outlook is the tax and regulatory environment under different administrations. Trump’s signature achievement in his first term was the Tax Cuts and Jobs Act of 2017, which slashed the corporate tax rate from 35% to 21%, and reduced the income tax rates for individuals and businesses. He has also promised to cut the corporate tax rate further to 15%, and to make the tax cuts permanent, if he wins a second term.

Biden, meanwhile, has proposed to raise the corporate tax rate to 28%, and to increase the income tax rates for the wealthy and the capital gains tax for investors. He has also pledged to invest in infrastructure, clean energy, education, and health care, which would require more government spending and borrowing. Biden’s tax and spending plans could dampen the profitability and growth prospects of some sectors and companies, especially those that benefited from Trump’s tax cuts.


The trade and geopolitical situation

A third factor that could influence the market mood is the trade and geopolitical situation under different presidents. Trump’s trade policy has been marked by protectionism, nationalism, and unilateralism. He has imposed tariffs and quotas on various countries, especially China, and has renegotiated or withdrawn from several trade agreements, such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP). He has also escalated tensions with Iran, North Korea, and other adversaries, and has alienated some of the U.S. allies, such as the European Union and NATO.

Biden’s trade policy has been more multilateral, cooperative, and pragmatic. He has suspended some of the tariffs that Trump imposed, and has sought to rebuild the relations with the U.S. allies and partners. He has also expressed a willingness to rejoin some of the trade deals that Trump abandoned, such as the TPP and the Paris climate accord. He has also pursued a more diplomatic and balanced approach to dealing with China, Iran, and other rivals, while maintaining a strong stance on human rights and democracy.


The market reaction

Given these factors, how will the markets react to a Trump comeback in 2024? The answer is not straightforward, as different sectors and asset classes could have different responses. For instance, some industries, such as energy, defense, and financials, could benefit from Trump’s policies, while others, such as technology, health care, and renewables, could suffer. Similarly, some asset classes, such as stocks, commodities, and cryptocurrencies, could rally on Trump’s stimulus and deregulation, while others, such as bonds, gold, and the dollar, could fall on Trump’s inflation and deficit.

Overall, the market reaction to a Trump comeback in 2024 could depend on the extent to which he can implement his agenda, and the degree to which he can avoid major conflicts and crises. The market could also factor in the likelihood of a Trump victory, and the margin of his win or loss, as well as the composition of the Congress and the Supreme Court. The market could also compare and contrast Trump’s policies and performance with those of Biden, and the expectations and preferences of the investors and consumers.


In conclusion, a Trump comeback in 2024 could have significant implications for the markets, both positive and negative, depending on the sector, asset, and scenario. The markets could also experience more volatility and uncertainty, as Trump’s policies and personality are often unpredictable and controversial. Therefore, investors and traders should be prepared for a wide range of outcomes and risks, and diversify their portfolios and strategies accordingly.



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