Investors watch equities, bonds, and crypto as US election unfolds

We’re hours away from the results of one heated US presidential race, and financial markets are gearing up for the wild swings to come. Traders are bracing for heightened volatility amid a tight race between Republican candidate Donald Trump and Democratic candidate Kamala Harris. The stakes are high, with potential policy shifts, economic ramifications, and the Federal Reserve’s imminent rate decision all poised to impact investor sentiment and market movements.

We have the latest on the election in this morning’s What We’re Tracking Today, above.

(**Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

This election’s outcome is poised to reshape various sectors, from healthcare and energy to technology and banking. A Trump victory could boost traditional energy stocks, while a Harris victory might favor renewable energy and tech sectors due to anticipated regulatory changes. Market participants are adjusting their portfolios accordingly, preparing for sector-specific impacts based on the election’s result.

What’s at stake for markets? As the dust settles on one of the most divisive US presidential elections in history, investors are zeroing in on the potential market ripples. From equities to bonds, currencies, and crypto, each asset class is poised for unique shifts depending on whether Trump or Harris claims victory.

Equities: Post-election market movements are expected to be sector-specific rather than broad-based. Stuart Kaiser from Citigroup notes that traders are bracing for a 1.8% swing in either direction for the S&P 500 immediately following the results. Goldman Sachs’ indexes — which track stocks favorable to either a Trump or Harris victory — show divergent trends; Trump-linked baskets waned in late October while Harris-aligned stocks gained momentum. “This will be one of the most easily investible election results ever, given the policy divergence between the two candidates,” David Wagner from Aptus Capital Advisors told Bloomberg.

Pulse check: All of the nation’s major indices closed in the green last night — the benchmark S&P 500 was up 1.2%, the Dow Jones closed 1.0% higher, and the Nasdaq saw the most significant increases with a 1.4% gain.

Bonds: “The markets are most concerned about a sweep and the lack of checks and balances,” BNY Mellon Wealth Management’s John Flahive told Bloomberg. Meanwhile, JPMorgan strategists predict that a Republican sweep could push 10-year yields higher, while a Harris victory with a divided Congress might stabilize the bond market, fostering a relief rally.

Currencies: Trump’s tariff policies are likely to bolster the USD, potentially pushing it by 7% higher on a trade-weighted basis, according to JPMorgan’s Meera Chandan. This would weaken other currencies like CNY, MXN, and most notably the EUR. A Harris victory, on the other hand, could weaken the USD and strengthen the EUR, with the threat of new tariffs in the rearview.

Crypto: It appears unlikely that the crypto sector would be harmed by which way the election race goes — A Trump administration will create a strategic reserve of BTC and ease regulatory constraints, spurring optimism in the crypto market, while a Harris administration “wouldn’t necessarily be a negative for the sector,” writes Bloomberg. “Whoever the next administration is, it’s going to take a very different approach on a regulatory perspective toward crypto,” Chris Rhine from Galaxy Digital is quoted as saying by Bloomberg.

The story is getting a lot of ink in international press: Bloomberg | CNBC | Reuters | The Guardian | CNN.

MARKETS THIS MORNING-

Asia-Pacific markets are mostly in the green in early trading. Japan’s Nikkei is leading the gains, up over 1.7%, Shanghai is up 0.6%, and South Korea’s Kospi is up 0.1%. The Hang Seng Index is in the red, down 1.1%.

Over on Wall Street, stock futures are flat as investors sit awaiting the results of the presidential election.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% yesterday on turnover of SAR 5.7 bn. The index is up 0.4% YTD.

In the green: Riyadh Cables (+7.0%), ACC (+4.5%) and MIS (+4.4%).

In the red: Wataniya (-10.0%), AlEtihad (-9.3%) and Burgerizzr (-5.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 2.7% yesterday on turnover of SAR 113 mn. The index is up 17.5% YTD.

In the green: Purity (+16.3%), Gas (+12.9%) and Jahez (+7.9%).

In the red: Naba Alsaha (-9.8%), Knowledge Tower (-8.2%) and Paper Home (-7.7%)

CORPORATE ACTIONS-

#1- The National Environment Recycling Company received CMA approval to increase its capital by 100% by granting bonus shares to shareholders, it said in a disclosure to Tadawul. The capital hike will be financed by capitalizing SAR 58.1 mn from the firm’s retained earnings.

#2- SAL Saudi Logistics is set for a shareholder reshuffle: The Tadawul-listed logistics player received a letter from Tarabot Air Cargo — a major shareholder that holds a 21% stake in SAL — indicating that it will transfer its shares in SAL to the investment portfolios of companies owned by Tarabot’ partners, according to a disclosure to Tadawul.