Battle for White House comes into sharper focus for Wall Street
By David Randall
NEW YORK (Reuters) -Investors fixated on earnings and monetary policy are starting to factor in another variable that could sway markets this year: the 2024 U.S. presidential election.
In his State of the Union address on Thursday, U.S. President Joe Biden proposed raising corporate taxes, whereas his opponent, Republican candidate Donald Trump, signed a 2017 law that slashed taxes on companies and the wealthy. Biden also boasted of U.S. economic progress under his tenure.
It is difficult to gauge how asset prices could be swayed by these proposals and whatever else the presidential candidates may put on the table in coming months. The winner is likely to face a narrowly divided Congress that would make it difficult to push through legislative changes.
That has not stopped some strategists from assessing how the political outlook could coalesce with other factors that have been driving markets. These include excitement over the business potential of artificial intelligence and shifting expectations of how soon the Federal Reserve might ease monetary policy. The S&P 500 index is up about 7.4% year-to-date and stands near a record high.
«You get a sense (investors)… have a lot on their plates right now, and politics is starting to come into that,» said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. «Even though everyone knows the candidates, it's going to be a pretty close race so it's very difficult to predict the outcome.»
Opinion polls show Biden, 81, and Trump, 77, closely matched. While the U.S. economy is performing better than most high-income countries, Americans overall give Trump better marks in polls for economic issues.
Biden on Thursday proposed to
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