Markets are digesting the attempted assassination of Donald Trump

From FX to stocks and wagers on the chances that Donald Trump will return to the Oval Office, it’s a very US-centric morning on planet finance as markets digest the attempted assassination on the presumptive Republican candidate’s life. Trump will be formally nominated this week at the Republican national convention.

The USD rose against other currencies yesterday and overnight and BTC climbed to USD 60k. “For us, the news does reinforce that Trump’s the frontrunner,” said Mark McCormick, global head of foreign-exchange and emerging-market strategy at Toronto Dominion Bank. “We remain USD bulls for the second half and early 2025.”

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The downside: The shooting underscores the risk of political violence in the US, which could finally major US equities benchmarks cool if investors rotate even temporarily to safer assets. “Political risk is binary and hard to hedge, and uncertainty was high as it is with the close nature of the race. This adds to volatility. I think it further increases the chance of a Republican sweep.”

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ALSO ON PLANET FINANCE- US inflation and interest rates could remain higher for longer than many expect forecasts despite some signs of cooling inflation, CNBC reports JPMorgan Chase boss Jamie Dimon as saying. “There has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world,” Dimon said. “Therefore, inflation and interest rates may stay higher than the market expects.”

In context: Monthly US inflation in June for the first time in over four years, prompting some to expect the Federal Reserve is more likely to start cutting rates in September. Fed Chair Jerome Powell told Congress last week that he has “some confidence” that inflation will cool to 2%. He also said that the Fed doesn’t necessarily need to wait for inflation to fall to 2% before moving on interest rate cuts, adding to the speculation that the first cut could come this fall.

MARKETS THIS MORNING-

Major Asian benchmarks are flat this morning as investors mull the attempted assassination of Donald Trump and the start later today of China’s Third Plenum meeting. The policy meeting of the Chinese Community Party takes place about once every five years and was expected last fall. Kickstarting the economy is at the top of the list of topics, but don’t expect CCP officials to dive too deeply into the rot that is the domestic real estate industry. (Markets are closed in Japan in observance of the Marine Day holiday.)

Futures suggest we’ll see something of a relief rally on Wall Street, where futures for the major equities benchmarks were up in overnight trading. European futures, meanwhile, are mixed as we head toward dispatch time this morning.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.8% yesterday on turnover of SAR 6.4 bn. The index is down 0.7% YTD.

In the green: Miahona (+10.0%), MBC Group (+9.9%) and Talco (+9.9%).

In the red: AlRajhi Takaful (-7.3%), Saic (-3.3%) and APC (-3.2%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.3% yesterday on turnover of SAR 35.4 mn. The index is up 4.8% YTD.

In the green: Azm (+18.6%), Ghida AlSultan (+9.8%) and Osool and Bakheet (+9.5%).

In the red: Bena (-8.1%), Lime Industries (-6.6%) and Knowledge Tower (-6.6%)

CORPORATE ACTIONS-

#1- Tadawul-listed National Medical Care (Care) has completed a SAR 34.1 mn share buyback at SAR 213.2 mn a piece for its employee stock incentive program, it said in a disclosure to Tadawul. Care said it has repurchased some 160k (representing 0.36% of the company’s total shares) for the program as part of its efforts to attract and retain talent.

#2- Derayah Financial will distribute SAR 6.5 mn in dividends to all unitholders of its Derayah Reit for 1Q 2024, it said in a disclosure to Tadawul. The dividends will be paid on Thursday, 22 August.