Sept 11 (Askume) – U.S. stock futures fell and the dollar eased in early Asian trade on Wednesday as Republican Donald Trump and Democratic Vice President Kamala Harris faced off for the first time, with some analysts saying Harris was the stronger performer.
Online prediction market PredictIt’s 2024 presidential election marketplace shows Harris’s chance of winning has increased from 52% before the debate to 55%, while Trump’s chance of winning has dropped from 51% to 47%.
Stock futures were weak during and after the debate, with the S&P 500 E-mini index down 0.5% and the Nasdaq 100 E-mini index down 0.65%.
The US dollar index, which measures the dollar’s strength against a basket of six major currencies, fell 0.23%.
Comment:
Convera Asia Pacific Chief FX and Macro Strategist Shear Lee Lim
“So far, the Harris-Trump debate does not appear to have any significant impact on the market, consistent with expectations of relatively low volatility before the event begins, with options markets pricing in just 73 basis points in USD/JPY. The USD/JPY point appears to be at a low of around 1.1%.
“That being said, this debate could still be a significant catalyst in changing the election odds as, currently, betting markets give Trump a slight edge in the overall election, with platforms such as Polymarket showing Trump’s chances at 52% compared to Harris’ 52%-45%.
“The election outcome could have a meaningful impact on fiscal policy and financial markets. Republicans are reportedly considering offsetting tax cuts with tariffs, while Democrats may seek to raise corporate and wealth taxes to pay for increased spending.”
Brian Nick, Head of Portfolio Strategy News Wealth, Stamford, Connecticut
“He did not discuss investor-related issues in detail. The next president will have to deal with tax issues, and he hasn’t dealt with that either. In terms of legislation facing the next president, that’s the biggest issue for markets and investors.”
“Some of the issues that I still have questions about — like Donald Trump’s views on removing some of the Fed’s independence — haven’t come to the fore, but overall, there’s not a lot to move the market and I don’t think the market is doing that. It’s no surprise there was a big reaction to this.”
Onu Varghese, Global Macro Strategist, Carson Group
“I don’t think this debate will change many people’s minds because voters are still deeply divided. The only sign of this is that Harris is pulling ahead in the prediction markets, but that still makes the race very close.”
“There hasn’t been a lot of substantive discussion about policy. None of the candidates are advocating the same economic policies that they are currently doing and, ultimately, a lot of the economic policies we enact next year will depend on the composition of the Senate and the House of Representatives and will be forced to expand the conversation around the Tax Cuts and Jobs Act, which was signed into law by former President Trump in 2017.”
Shoki Omori, chief Japan counter strategist at Mizuho Securities
“Harris was quite nervous at first, but then she grew more confident and was very clear about her economic policies. This gave the market some relief,” the dollar weakened, “although it is hard to say which way the dollar is going right now if Harris or Trump is elected president.”
Gregory Faranello, head of US rates, AmeriVet Securities
He said, “Wangwang, I think Vice President Harris certainly did a good job. She stuck to her word. But you know, we still haven’t learned anything new other than what she said.”
“No major shocks. We’ll have to see what the polls say in the next few days, but you know it’s going to be a tight election and the market will probably be more focused on short-term monetary policy than the election.”
Steve Sosnick, chief market strategist, Interactive Brokers, Greenwich, Connecticut
“Everything was very general during the debate. They talked about wafers, energy and solar power, but didn’t really talk about anything specific. There was nothing worth digging into in the market.”
“With the margins being so close, I don’t think the market knows how the whole campaign will play out at this stage. Harris appears to be beating Trump, but I don’t know if the market has voted that yet. And I don’t know if people need to be reassured or not. We’re likely to see more reactions as the key elements of this debate start to emerge and get discussed over the next few days.”
Vasu Menon, Managing Director, Investment Strategy, OCBC Bank, Singapore
“Today’s debate will go nowhere. We don’t even have a clear winner. What’s going to happen is in the data, how the economy is going to perform in the coming weeks, particularly the jobs data, and what they’re saying.” The campaign leading up to November 5 will determine the final outcome.
“Harris champions better policies for the middle class, while Trump positions himself as the strong leader America needs to counter those who take it for granted. The question is: will Americans act on policy or vote on rhetoric?”
Rob Carnell, Head of Research, Asia Pacific, ING
“I don’t think there’s much of a market out there … there doesn’t seem to be much right now that’s particularly affordable. I think Harris is managing Trump very well.”
“You would expect that if he (Trump) performs better, you would see the dollar strengthen. So I think that’s the way the market is looking at it. Slightly tilted towards Harris.”
Ken Cheung, Director of Asia FX Strategy at Mizuho Securities, Hong Kong
“Part of the dollar’s move is due to the debate performance. I think the explanation for the yuan is that it is very sensitive to Trump’s tariff policy.”
Jack Ablin, Chief Investment Officer at Cresset Capital.
“This debate doesn’t seem to change the fact that this is going to be a close election.”
“They covered all the issues; the moderators did a great job managing the debate and voters got a good picture of the policies and personalities of both candidates.”
“But perception is reality, and if people feel their lives are not improving, that will influence their behavior in November.”
Carl Schamott, Chief Market Strategist, Corpay, Toronto
“The verdict on the coup is still out, but the dollar is falling as prediction markets have Kamala Harris ahead of Donald Trump by a slim margin.”
“Currencies that could be on the front lines of another trade war — the Mexican peso, the Canadian dollar and the Chinese yuan — are rising amid lower trade volumes.”
