Today, March 5, 2024, is Super Tuesday for Americans as the nation enters a critical phase of the US presidential election that culminates in November. Super Tuesday is the biggest day to date in the 2024 race for the White House when voters in 15 states and one US territory choose candidates for president.
And, the market investors globally could be getting perturbed. “Investors are uneasy about a potential Biden-Trump rematch in the US presidential race in November, but for now they should be concentrating on fundamentals rather than political fervor,” says Nigel Green, CEO, deVere Group.
Green says: “Investors in the US and around the world will be watching Super Tuesday keenly as it gives us insights into the perceived strengths and weaknesses of Joe Biden and Donald Trump – and one of them is most likely to be the next ‘CEO’ of the world’s largest economy.
If the election leads to a divided government, as is the current situation, the likelihood of additional legislative gridlock is expected to mitigate any market response.
Being monitored by Wall Street and global financial markets most carefully is the possibility of a Red Wave scenario, in which Trump returns to the White House accompanied by a Republican sweep of Congress.”
The deVere CEO says, as always, there will be “clear sector winners and losers” if there is either a Red Wave or a Blue Wave – where Biden’s Democrats get the sweep – with historical patterns and policy preferences of each candidate providing insights into potential sectoral impacts.
For example, a Trump victory would favor traditional energy companies, including oil and gas producers; whereas Biden has shown strong support for clean energy. Renewable sectors, such as solar and wind would, therefore, likely see increased government support and investment.
Elsewhere, Biden has expressed support for expanding the Affordable Care Act (ACA), which could benefit healthcare providers and insurance companies, but pharmaceutical companies could face more pressure to lower drug prices, impacting their profit margins.
In the midst of a hectic week for markets that include the Super Tuesday primaries, which might help Donald Trump win the Republican presidential nomination, and important U.S. economic data, U.S. stock futures retreated further from record highs.
The presence of Federal Reserve Chair Jerome Powell before Congress this week is another event that the world markets are carefully watching. In his semi-annual parliamentary testimony, Federal Reserve Chairman Jerome Powell will appear before the Senate Banking Committee on Thursday and the House Financial Services Committee on Wednesday.
The deVere CEO concludes: “The US presidential election matters for US and international investors, especially at a time when things are so polarized, and as such all eyes will be on Super Tuesday as it’s the biggest day so far in the election year.