---
title: "The impact of the presidential election trade on assets?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/24640696.md"
description: "Introduction: ①U.S. stock Q3 earnings, ②presidential election, ③Q4 interest rate cut expectations, these three main themes jointly influence the capital market. We will only focus on the presidential election theme to quantitatively analyze the four scenario models under U.S. election trading. 1. "Trump Trade", which assets is the market trading? The recent rise of Trump concept stock (DJT) represents the probability of Trump's election victory. As of last weekend, Trump's winning probability has rebounded sharply to 61%, "Trump Trade" is back, both Bitcoin BTC and the U.S. dollar index are strengthening..."
datetime: "2024-10-22T10:59:47.000Z"
locales:
  - [en](https://longbridge.com/en/topics/24640696.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/24640696.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/24640696.md)
author: "[土鸡瓦狗的ETF🐒](https://longbridge.com/en/profiles/11794570.md)"
---

# The impact of the presidential election trade on assets?

![image](https://pub.pbkrs.com/uploads/2024/6257957122020f13b5f5ba72bf178e83?x-oss-process=style/lg)

**Introduction: ①US Q3 earnings, ②****presidential election****, ③Q4 rate cut expectations, these three main themes intertwine in the capital markets. We focus solely on the presidential election thread, quantitatively analyzing four scenario models under US election trading.**

**1\. What assets are being traded in the "Trump Trade"?**

Recently, the rise of Trump concept stocks (**DJT**) reflects the probability of Trump's election victory. As of last weekend, Trump's win probability rebounded sharply to 61%, marking the return of "Trump Trade." **Bitcoin BTC** and the **US Dollar Index** both strengthened, while **US Treasury** yields rose, reflecting market expectations that Trump 2.0 will reignite inflation, leading to a repricing of financial markets for a Trump presidency.  
 

![image](https://pub.pbkrs.com/uploads/2024/7cf9c35a7fd645039f9f6279217e4b2f?x-oss-process=style/lg)

**2\. What are the possible outcomes of the presidential election? How will major asset classes perform?**

For the presidential election, based on betting odds (which are more sensitive and indicative), there are four possible scenarios by party:

**Scenario 1: Republican sweep (43%), US stocks \> USD \> gold \> US Treasuries.** On one hand, Trump could smoothly implement policies like corporate tax cuts and deregulation, benefiting US stocks with more "America First" policies. On the other hand, policy resonance (tariffs + immigration tightening) could increase US reflation pressure, potentially boosting the USD while pressuring long-end Treasuries.

**Scenario 2: Trump + Republican Senate, Democratic House (15%), US stocks \> USD = gold \> US Treasuries.** A split with the House (holding fiscal power) would hinder Trump’s agenda, making tariffs and tax cuts harder to pass. Thus, US stocks might see only modest gains.

**Scenario 3: Democratic sweep (14%), USD and US stocks weaken.** Corporate tax hikes could drag on earnings, while wealth taxes dampen risk appetite, pressuring US stocks. A recession could weaken the USD. However, Harris’s fiscal policy is less aggressive, limiting Treasury yield rises vs. a Trump win.

**Scenario 4: Harris + Republican Senate, Democratic House (24%), US stocks may underperform.** The House’s control over spending could help pass Harris’s tax policies (e.g., corporate tax hikes), pressuring stocks short-term but creating structural opportunities. Other assets neutral.

![image](https://pub.pbkrs.com/uploads/2024/c2e6ba2603fe4f8d6e207879b5c5ef3b?x-oss-process=style/lg)

**3\. Which stocks are most affected by the four election scenarios?**

The US election outcome impacts sectors differently, especially **tech giants** and **gig economy** firms.

① If **Harris wins with a split Congress**, social media firms like **Meta** and **Snap** may benefit from a potential TikTok ban, while antitrust pressure on big tech persists but won’t drastically alter operations due to gridlock.

② If **Democrats control the White House and Congress**, big tech could face tougher antitrust rules (e.g., a US version of the EU’s Digital Markets Act). **Meta** and **Snap** might gain short-term from a TikTok ban, but gig firms like **Uber** and **Lyft** could face cost pressures from new laws. Corporate taxes may rise.

③ If **Trump wins with a split Congress**, tariff shifts could favor domestic e-commerce. Big tech’s antitrust risks may ease, but **Googl** could face scrutiny over search results. Gig economy growth may continue without worker reclassification laws.

④ If **Republicans control the White House and Congress**, tax cuts and high tariffs could boost tech and domestic e-commerce. Chinese firms like **Temu** and **Shein** may face challenges, indirectly affecting **Googl** and **Meta**.

Overall, **Meta** and **Googl** are highly sensitive to election results, as are gig firms like **Uber** and **Lyft**. Other sectors (e.g., dining/retail) should watch immigration and China tariffs. Historically, **consumer stocks** outperform under Republicans, while **energy** and **tech** fare better under Democrats—though this diverges from BofA’s analysis. Long-term election impacts are limited, but short-term market moves hinge on **tariffs** and **tax cuts**.

![image](https://pub.pbkrs.com/uploads/2024/8712c9fad13899e6b15abab72555becf?x-oss-process=style/lg)

But don’t lose sight of the logic: **stocks’ primary driver now is Q3 earnings**, while the election is a **secondary** factor.

**4\. What policy trends might emerge under Trump or Harris?** (Chart)

![image](https://pub.pbkrs.com/uploads/2024/eb05b8041a2ff607e28668ad59ad9b96?x-oss-process=style/lg)

## Comments (2)

- **夜空里最亮的星 · 2024-10-22T11:27:20.000Z**: 最后一张图有点糊
- **水沝淼㵘9527 · 2024-10-22T11:08:11.000Z**: 😁