2024 'Trump Pump' After THAT Debate?

Listen, everyone agrees on this—Biden’s debate performance on Thursday was not great.

But while political pundits are asking if a replacement candidate is needed, we investors should be asking how this will affect the stock market, the economy, and wealth-building.

In many ways, it’s still too early to tell. But here are a few immediate and long-range indicators to watch.

Betting on the Future:

First, take a look at the betting numbers. After the debate, Trump’s odds of winning the election in November have risen to 55% from 52%, while Biden’s chances have dropped to 19% from 36%.

Betting markets aren’t official predictors, but they do reflect public sentiment. After all, bookies don’t want to lose money, so they adjust odds based on real trends.

What We Do Know:

Mostly though, we want to build our investing portfolios based on a more data-driven approach, so here are the things we’re watching…

Rate Cuts on the Horizon?

Inflation is getting closer to the Fed’s 2% target. If the Fed decides to cut rates one or more times later this year, it could boost the market. Think of it as a tailwind for your investments.

AI is Here to Stay:

Artificial Intelligence is not a fad. Companies adopting AI tech are seeing productivity boosts. The tech giants like Nvidia and Microsoft are leading the charge. Expect more growth here and look for entry points during minor dips and corrections.

Economic Strength:

Despite all the noise, the U.S. economy is holding up. Consumer spending and the job market aren’t great — but they are holding their own, and those are good signs for investors. As long as these stay strong, the market has a solid foundation. We like to watch for revisions (that come 2-4 months later) to verify the data was correct or see if we’ve been basing optimism on faulty assumptions. This is a critical part of our research.

Broad Market Interest:

Tech stocks have been the stars, but now other sectors are joining the party. Energy, utilities, materials, financials, and healthcare are seeing more interest. It’s like having a balanced diet—more variety means more stability.

Potential Risks:

Every surge has its risks. Overvalued tech stocks and unexpected economic slowdowns could be bumps in the road. Stay alert and ready to pivot if needed.

Healthcare Stocks on the Rise:

Thanks to Biden’s debate performance, healthcare stocks, especially those tied to Medicare, got a bump. UnitedHealth, CVS, and Humana saw notable gains. Investors think a Trump win could ease some regulatory pressures here.

Political Uncertainty:

Debates and elections bring uncertainty, which can lead to market volatility. But remember, markets often rebound after the dust settles. Keep an eye on economic data and market trends.

The Takeaway:

Stay alert and watch these three key factors:

• Potential rate cuts,

• The AI boom, and

• Overall economic strength.

The Wrapup

Some investors are taking profits while the market is surging and moving them into hedges like crypto or gold. Some are diversifying into more stable sectors to balance their portfolios.

Politics can be unpredictable, but smart investing isn’t.

Stay savvy,

Tom
[email protected]

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Next time we’ll take a look at what to expect in the Real Estate market as home prices and interest rates remain high.

Let me know!