Global Intel Hub — 6/28/2024 — Now that we are approaching November, the more time that goes by the more it seems like another Biden term is increasingly unlikely, even if the fix is in, this time, it’s going to be hard to evidence that 70 Million Americans voted for Biden. So traders are running scenarios what does a Trump 2nd term look like for markets vs. a Biden 2nd term, let’s examine a few obvious examples.
Biden-
Being a warmonger, a 2nd Biden term can mean an escalation into conflicts well beyond Ukraine and Israel, leading to an increase in Defense spending for names like Anduril, and the traditional defense industry as well.
Inflation under Biden has been worse than any other period in US economic history, so we can expect more of the same there. Most traders are familiar with how the Fed manipulates markets to increase or decrease inflation (by M3, Monetary Policy, Interest Rate Policy, etc.), but few are aware that the 2nd leg of the stool is White House Policy. In the case of Biden’s Administration, Sanctions against Russia, the largest Oil producer in the world, had disastrous effects on Domestic inflation and put pressure on the US Dollar as a reserve currency (for example, Russia previously used the USD as the #1 non Ruble trade currency for Oil sales, and even domestically).
We can expect a weaker US Dollar with another Biden term, if you can imagine the Dollar being even more weak.
Overall Biden is bad for Stock Markets, as the only real winners in the past 4 years have been AI stocks, but the only real delivery of any technology we’ve seen has been the Data centers and chip makers to support the hype, like NVIDIA.
Possible Wildcards include a replacement by Hillary Clinton or Big Mike, and there’s a clear legal path to do so. If Biden dies, and the VP becomes President, they can choose any VP (no election). Then the President can resign, making that chosen VP (Clinton or Mike) the President.
Trump-
Historically, it has been the Republicans who have been War Hawks, especially the NeoCons but Obama changed all that, making a Purple UniParty or the “War Party” and strangely, Trump is the most Anti-War President we’ve had since World War 2 perhaps ever in History. We can expect a de-escalation of World War 3 at the least, at best, a total US pull out of foreign entanglements.
This will be bad for the Defense industry, but not necessarily a death sentence, as many operations can be re-purposed. Initially we can see a pull back in Defense stocks, but in the long run, they can serve other missions. For example, SpaceX has a huge non-Defense business with contracts from the Military, involving non-Terrestrial missions, Satellites, Communications, and other non-Military applications (although in many cases the Military is the client).
While the White House doesn’t affect Fed policy, any unwinding of the conflict with Russia will be net positive for the USD, positive for inflation, and positive for US markets. Russia is not the largest market in the world, but the BRICS certainly invested more in non-US investments, post sanctions.
Tax cuts and other incentives can boost the real economy which will ultimately boost stock prices. White House policy that’s pro strong US Dollar, and for lowering inflation, will be positive for the economy. Inflation has been the biggest business killer in the past 2 years under Biden, it’s been bad for the consumer, it’s caused some businesses to totally shutter. Big Monopolies are the only beneficiaries, and so is the 1%, as their balance sheets inflated faster than their spending and debt servicing.
A Trump 2nd term will be positive for markets, for a strong US Dollar, and strong foreign policy which will decrease the need for kinetic Army.
Possible wildcards include releasing of secret technology kept under lock and key by the Deep State, as well as hidden treasures and technologies reserved only for the Deep State Elite’s.
If Trump 2 rolls out his plan of rule of law, pro-business, and Pro-USA, we can see what that would look like after 4 years of Trump but the big question remains, what’s next? Trump doesn’t have an obvious successor, and the RFK Jr. match up didn’t work out, so it’s not clear who would continue the legacy after Trump (although there are many would be business minded politicians on the rise like Vivek and others, who would look at government like a business which seems to be the only real way to run an organization.. )
