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 What We’re Tracking Today, above.

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-Pascific 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-

The ADX rose 0.6% yesterday on turnover of AED 1.1 bn. The index is down 2.0% YTD.

In the green: Abu Dhabi National Takaful Co. (+14.9%), Gulf Pharmaceutical Industries (+10.5%) and Fujairah Building Industries (+10.3%).

In the red: Bank of Sharjah (-2.2%), Adnoc Gas (-1.8%) and Americana Restaurants International (-1.3%).

Over on the DFM, the index rose 0.2% on turnover of AED 309.4 mn. Meanwhile, Nasdaq Dubai closed up 0.9%.

CORPORATE ACTIONS-

Emirates Hospitals Group (EHG) completed its restructuring plan under UAE bankruptcy law, reducing its debt, securing fresh funds for operations and capital expenses, and introducing new governance guidelines, according to a press release.

Background: EHG’s parent company KBBO Group received the greenlight for the restructuring plan last year, which included raising AED 150 mn in new capital, recapitalizing its balance sheet, and an option to implement asset disposal and rationalization. The financial troubles stemmed from three years ago when founder Khalifa Bin Butti Al Muhairi filed for bankruptcy after the collapse of NMC Health, in which KBBO was the largest shareholder.

JBF RAK also finalized its restructuring plan, officially exiting the JBF Group to establish independent governance, management, and operations, according to a press release. Under the new structure, JBF RAK will operate separately from JBF Bahrain and JBF Belgium, with funding and strategic support from the Investment and Development Office (IDO) of Ras Al Khaimah, which may take on full ownership of JBF RAK in the future as part of the plan.

IDO appointed a new executive team for JBF RAK, led by CEO Rohit Vashistha (LinkedIn). Vashistha previously served as CEO of Indorama Ventures in Turkey.