Wall Street is prepping for Trump-Biden bumpy ride

investmentnews.com:

This much is clear for the financial markets: The US presidential election is likely to usher in a bumpy end to 2024.

Futures on the VIX Index — known as the fear gauge — show traders are already preparing for the risk of stock-market swings around the November vote. Analysts say the US dollar may rise — at least temporarily — as investors shift into havens. And bond traders are mindful of a potential repeat of 2016, when Donald Trump’s victory triggered a selloff on worries that tax cuts would push interest rates higher by pouring fuel on an already growing economy.

But beyond that, the longer-term implications for stocks, bonds and currencies are difficult to predict, complicating efforts to provide a clear-cut playbook for how to best position for one outcome or the other. 

A victory for President Joe Biden, as is the case with incumbents, would likely have less financial-market impact simply by keeping the current course on track. By contrast, Trump and his advisers have floated plans — on immigration, trade, taxes and the Federal Reserve — that could significantly alter the current calculus — though at this point little if any of that appears to be priced in.

Then there is another wildcard: Late Thursday, a New York jury found Trump guilty of 34 counts of falsifying business records to conceal a hush-money payment to an adult film star ahead of the 2016 election, making him the first former US president to be convicted of crimes. 

“Markets do not like uncertainty,” said Steven Blitz, chief US economist at TS Lombard. “There’s a lot of pre-game posturing going on.”

The stock market has tended to advance under presidents of both parties, influenced more by the direction of the economy and interest rates than by fiscal