On July 21, local time, Biden announced on his personal social media that he would withdraw from the 2024 US presidential election. He said that he had intended to seek re-election, but for the best interests of the Democratic Party and the United States, he decided to withdraw from the presidential election and focus on completing his presidential duties during his term. Biden recommended Vice President Harris as the Democratic presidential candidate nominee.

As the public opinion about Biden's withdrawal from the election rises, the Democrats' calls for Harris are getting louder and louder, and the market's confidence in Trump's victory has declined. In any case, the fact that Biden withdrew from the election has caused a sudden change in the pattern of the US election. Investors should keep a close eye on market dynamics and make reasonable predictions about market trends.

Is the "Trump trade" about to cool down?

Market analysts believe that although the "Trump trade" was still the main line of trading last week, investors began to re-evaluate the impact of different candidates on the market, which may lead to the gradual unwinding of the "Trump trade" and the performance of emerging market assets has received more attention. Larry Adam, chief investment officer of Raymond James, pointed out that in the context of Trump's policy preferences, the market originally expected the energy, financial and healthcare sectors to benefit, but if the market fluctuates, investors will pay more attention to the fundamentals of the US economy, corporate earnings growth and the Federal Reserve's policies, and the importance of these factors will surpass political factors.

Rafia Hasan, chief investment officer of Perigon Wealth, emphasized that the market does not like uncertainty, and the uncertainty of Democratic candidates may increase investors' anxiety. She reminded investors to stay calm because it is currently impossible to predict the specific reaction of the market in the next few weeks. Wall Street generally believes that due to the lack of comparable historical data, the market's possible reaction is difficult to predict. Although the S&P 500 index rose sharply after Lyndon Johnson announced that he would not seek re-election in 1968, the situation at that time was very different from now.

With the upcoming financial reports of technology giants, the market rotation phenomenon may change. Previously, the "Trump transaction" caused technology stocks to fall, and the market style shifted from large market capitalization to small companies, and from high valuations to medium and low valuations. Analysts believe that with the changes in the election, US stocks face more uncertainty this week. The upcoming financial reports of Alphabet and Tesla may trigger market fluctuations. For Tesla, the market focuses on gross profit margin, sales outlook and the progress of the Robotaxi project. Google needs to pay attention to the growth rate of advertising revenue and the revenue growth of cloud computing business.

The three main lines of the current market - "Trump deal", Fed rate cuts and technology stock earnings - are all facing uncertainty, the VIX volatility index has risen, and the capital market may face greater risks. Investors need to pay close attention to these factors to cope with the constant changes in the market.

How will Harris's policy propositions affect the market?

Kamala Harris's policy propositions involve technology regulation, large technology companies, climate and energy, artificial intelligence and other fields, especially in climate and energy policies. She advocates clean energy and environmental justice, pledges to invest $3 billion in the Green Climate Fund, and supports the development of renewable energy. Harris's policies may promote the transformation of the energy market from traditional energy to clean energy and have an impact on traditional energy companies.

From the perspective of the financial market, this transformation may have an impact on the stock prices and market values ​​of traditional energy companies, prompting investors to reassess their long-term value and risks. At the same time, clean energy companies may attract more investment due to policy support. Harris's tough stance on large oil companies and active participation in international climate negotiations will promote the transformation of the energy market.

In addition, Harris's policy advocacy will prompt the traditional energy market to reduce its dependence on fossil fuels and affect oil prices. Although the global economic recovery and increased energy demand may maintain crude oil market demand in the short term, the instability of the geopolitical situation remains a key factor affecting oil prices. Harris supports strengthening the regulation of methane emissions in the oil and gas industry, which may increase corporate operating costs and affect crude oil production costs and prices.

Harris also promotes natural gas as a clean energy alternative, especially in the power and industrial sectors. Policy support may increase natural gas demand, especially in developing countries. However, the supply and demand balance in the natural gas market is also affected by geopolitical and economic factors. Harris's policies may reduce the impact of geopolitics on the natural gas market through international cooperation and energy diversification. The Biden-Harris administration's suspension of new liquefied natural gas export facility approvals may affect U.S. natural gas exports and global market supply, which may push up prices in the short term.

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