Significant media attention is now focused on the start of criminal proceedings, next Monday, of Donald Trump’s historic hush-money trial in New York.
The a trial has clear implications for Trump’s Presidential campaign too of course, as it is expected to last a few months and impact on his campaigning activities. But when it comes to the Election, there are also implications for the result in November too. Trump has pleaded ‘not guilty’ but if he is found guilty he could face up to four years in Jail.
Looking ahead to that all important US Election later this year, Moz Afzal, CIO at EFG Asset Management, has shared his latest thinking on what a Trump/Republican victory in November might mean for the markets commenting:
“I fully expect there’s going to be volatility, particularly in the run up which at the moment is highly uncertain. Trump is clearly winning, and the US stock market likes Trump to win because he wants to introduce market-friendly measures such as a cut to corporation tax and deregulating the economy. That’s good for financials, healthcare or biotech and the tech sector itself.
“On the other hand, he’s not great for importers, because he may well put tariffs up and be much more protectionist. You can see some of that narrative playing out at this point in the election, because at the moment, he’s winning.”
Which sectors may experience the most volatility in the run up to the election?
“Materials and energy are definitely going to be one because of that Russia-Ukraine element.
“Healthcare is also a really important one, because Biden’s Inflation Reduction Act has provisions on healthcare drug pricing, for example. So if Trump does indeed return to the White House, healthcare could be a beneficiary as he may redact some of those healthcare pricing initiatives that come into force in 2025 and beyond under Biden.
“Under the Biden administration, the ability of the large tech companies to be able to enact acquisitions and mergers has been massively stunted. And so the conventional wisdom is that if Trump comes along, he will allow M&A to happen again.”
