2024 US election: Potential implications for portfolios
A potential Trump presidency could have more material effects on markets, but with polls currently too close to call, investors should carefully consider any changes to portfolios.
Presidential opinion polls and swing states
Congressional races
Candidate policies and potential market implications
The policy platforms of the two major candidates present stark contrasts, particularly in the areas of taxation, regulation, and trade, which could have varying consequences for the broader economy and financial markets.
Vice President Harris has articulated plans to expand social service programmes, cancel additional student loan debt, and pursue reductions in drug prices. These initiatives are complemented by proposed tax increases on corporate, individual, and capital gains income. While these tax measures may reduce household disposable income, the associated spending on social programmes may help offset some of the potential economic drag.
In the near term, the market impact of Harris's policies is expected to be modest as they represent a continuation of the current administration’s policies. Her trade stance, which includes maintaining tariffs on Chinese goods and possibly raising tariffs on strategic sectors, could marginally increase inflation but is unlikely to result in significant economic or market impact.
Former President Trump’s platform, by contrast, features more aggressive and potentially market-moving proposals. His plans include reducing corporate taxes, potentially to as low as 15%, which would likely provide a substantial boost to corporate earnings and equity markets. Additionally, his regulatory approach is expected to be more lenient, further supporting business interests and potentially stimulating economic growth.
However, his stance on trade, particularly his proposal to impose additional tariffs on imports from China and other countries, could lead to higher inflation, slower economic growth, and diminished business confidence. These protectionist measures, while intended to bolster domestic industries, may strengthen the U.S. dollar, undermining the competitive advantages that the tariffs are designed to achieve. Trump's desire to exert more influence over the Federal Reserve also poses a potential risk to market confidence, particularly if such actions were perceived to threaten the central bank's independence.