The stock market is set to open tomorrow amid speculation surrounding President Joe Biden’s decision not to seek reelection, leading to expected market volatility.
McDonald’s is confronting its first legal action related to the E. coli outbreak linked to its Quarter Pounder.
This political development is likely to heighten economic uncertainty as Democrats scramble to rally support behind a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee.
Josh Thompson, CEO of Impact Health USA, commented that if President Biden announces his exit from the race, the markets will likely react with volatility. He emphasized that investors typically favor stability, and this significant political change would disrupt that stability.
Such uncertainty could lead investors to retreat to safer assets, such as gold, silver, and the Swiss franc, which tend to maintain value during times of political and economic turmoil.
There is also the potential impact on what has been termed the “Trump Trade,” which gained momentum after former President Donald Trump outperformed Biden in a recent debate and survived an assassination attempt. The Trump Trade reflects market trends associated with the prospect of a second Trump administration. Trump’s previous tenure was marked by favorable policies for businesses, with sectors like healthcare, banking, cryptocurrencies, oil, and even Tesla expected to benefit from a second term.
Analyst Ed Mills from Raymond James noted that even if Biden withdraws, the electoral odds will likely remain unchanged, with a 60% chance for Trump versus a 40% chance for Biden or another Democrat. While there might be a temporary pause in the momentum of the Trump Trade as investors reassess the political landscape, a broader market reaction is not anticipated.