What financial and stock markets hate most is uncertainty. Kamala Harris’s entry into the electoral race would have alleviated investor uncertainty in markets around the world.
The withdrawal of President Joe Biden from the electoral race and the entry of Kamala Harris, representing the Democratic Party, into the competition against Donald Trump for the November elections has reassured the markets and positively boosted the New York Stock Exchange, after having been in the red since April.
Although key data, such as US inflation and the Fed’s decision on a rate cut, are still pending to provide further clarity on the future of monetary policy, Biden’s resignation would have eased investor uncertainty in markets around the world. In Europe, the main stock market indices also responded in the green.
However, the situation in Asia remains complicated, as markets have moved downwards, influenced by changes in monetary policy in China. In this regard, the People’s Bank of China decided to cut interest rates to reverse the slowdown in the economy affected by the serious crisis in the real estate sector.
Vicente Albornoz, Dean of Economics at the University of the Americas in Ecuador, told DW that what financial and stock markets hate most is uncertainty. Therefore, they are likely to prefer Democrats to Republicans since a second Trump administration could increase the deficit. Along those lines, Kamala’s economic policies would be more predictable and would maintain a balance in public finances.
Meanwhile, Harris’ campaign broke a fundraising record, raking in $81 million just 24 hours after Biden’s announcement. Analysts expect a volatile environment in the coming weeks.
Source: Larepublica
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