Tomorrow, the stock market will react to the announcement that President Joe Biden will not seek reelection, which is expected to bring about volatility.
AT&T has decided to divest its interest in DirecTV, a move that could exacerbate economic uncertainty as Democrats rush to support a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, stated that if Biden were to declare his exit from the race, the market’s immediate response would likely be marked by volatility and uncertainty. Investors typically favor stability, and such a significant political change could disrupt that.
In light of this uncertainty, investors might shift toward safe-haven assets like gold, silver, and the Swiss franc, which tend to be more stable amid political and economic unrest.
Additionally, there may be a slowdown in the so-called “Trump Trade,” which has been gaining traction as former President Donald Trump, the Republican nominee, has recently outperformed Biden in debates and survived an assassination attempt. The “Trump Trade” refers to market behaviors shaped by the anticipated policies of a potential second Trump administration, which are seen as favorable for business.
Analyst Ed Mills from Raymond James noted that even if Biden withdraws from the race, they would not immediately alter their electoral predictions, currently at 60% for Trump versus 40% for Biden or another Democrat. Mills suggested there might be a reassessment of the Trump Trade but did not foresee a significant broader market reaction.