Prof G Markets Harris vs. Trump: The Markets React — ft. Robert Armstrong
12 snips
Jul 25, 2024 
In this engaging discussion, Robert Armstrong, a US financial commentator for the Financial Times, dives into the interplay between elections and market movements. He reveals why small-cap companies are flourishing and analyzes why the Federal Reserve might delay interest rate cuts until September. Armstrong also discusses the market's resilience amid political shifts, especially President Biden's exit from the presidential race, and the enduring impact of inflation. Get ready for insightful banter that balances humor and serious economic issues.
AI Snips
Chapters
Books
Transcript
Episode notes
Market Reaction to Biden's Exit
- Markets have been relatively calm after Biden dropped out and endorsed Harris.
- This is partly because Biden's exit was anticipated, and the inflation outlook has also shifted.
Small-Cap Stock Surge
- The recent surge in small-cap stocks could be due to two factors.
- Some see it as a "Trump trade" (supporting domestic companies), while others attribute it to rate sensitivity and the expectation of lower rates.
The Trump Trade
- The "Trump trade" is generally seen as a curve steepener (long-term rates rising more than short-term rates).
- This is because Trump's policies are perceived as inflationary (tax cuts, tariffs, etc.).
