The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, leading to expected volatility.
Novo Nordisk, the manufacturer of Ozempic, is in early trials for an experimental anti-obesity pill that has shown promising results.
Biden’s decision is likely to highlight economic uncertainty as Democrats quickly rally around a potential new candidate, with Biden endorsing Vice President Kamala Harris as a possible nominee.
Josh Thompson, CEO of Impact Health USA, indicated that if Biden announces his withdrawal from the race, it would likely result in volatility and uncertainty in the markets, as investors typically favor stability and predictability. This shift could lead to a movement towards safe-haven assets such as gold and the Swiss franc, which are seen as less susceptible to political and economic turbulence.
Another outcome could be a slowdown in the so-called “Trump Trade.” This term refers to the trading behavior of investors in anticipation of a second Trump administration, notably after Donald Trump outperformed Biden in a debate and survived a recent assassination attempt.
Investors have shown increased interest in sectors like healthcare, banking, cryptocurrency, oil, and companies like Tesla and the Trump Media and Technology Group, which are expected to benefit from a potential second Trump presidency.
However, Ed Mills, a policy analyst with Raymond James, stated that they would not immediately alter their electoral odds, which favor Trump at 60% against Biden or a Democrat at 40%. He noted that while there might be a pause in the recent “Trump trade,” they do not foresee a broader market backlash from this political announcement.