Market reaction to potential Republican sweep
After stumbling on Monday following the release of weekend polls indicating a tight White House race, the market appears poised to invest in trades that could benefit from a Republican sweep.
Electoral college update
As the electoral college tally unfolds, Trump holds a significant lead over Harris. According to CNN, Trump has secured 211 votes, while Harris holds 153. The Associated Press reports Trump with 230 votes compared to Harris’s 179.
With 270 votes needed for victory, key states like Wisconsin, Michigan, Pennsylvania, and Nevada remain too close to call.
Potential Republican policies
A Republican sweep could usher in notable policy changes, including Trump’s proposed 10% universal tariffs on most imports, affecting allies like the European Union (EU) and Japan. For Chinese imports, tariffs could escalate to 60% or more if he secures the presidency.
Fiscal expansion would likely follow a Republican sweep, with increased spending, lower taxes, and rising debt. Trump plans to make the 2017 personal tax cuts permanent and reduce the corporate tax rate to 15% for domestic manufacturers, which could further widen the deficit, currently at a significant 6% of gross domestic product (GDP).
Cryptocurrency and equities trends
The potential for a pro-crypto Republican administration has pushed bitcoin to a record high of $75,080, up 7.15%. Momentum suggests a run towards $80,000 could be within reach.
US equity futures are also trending up, with the S&P 500 gaining 1.20% to 5882, and the Nasdaq 100 adding 1.27% to 20,600.
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