AP PhotoCheck out our live blog for the latest updates: Donald Trump shot during rally in Pennsylvania LIVE: Bullet penetrates Trump’s upper ear
“We’ll definitely see some protectionist and safe haven flows in the Asian markets early in the morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I think gold could test its all-time highs. We’ll see buying of the yen and dollar and some inflows into government bonds.”
However, early market commentary suggests that the shooting could increase the chances of a Trump election victory, shifting focus to securities most exposed to the president’s policies, which could ultimately be negative for Treasuries.
Assets linked to the so-called Trump trade range from dollars to Treasury bonds to stocks in private prisons, credit-card companies and health insurers. Investors are betting that Republican policies on tariffs, immigration and the budget deficit will lead to a stronger dollar, higher bond yields and a more favorable environment for these stock sectors.
Traders will also be keeping a close eye on market indicators for expected volatility on Monday, including the tariff-sensitive Chinese yuan, which is beginning to price in the outcome of the U.S. vote.
Trump said he was shot in his right ear during gunfire at one of his rally in Butler, Pennsylvania. The Trump campaign said in a statement that Trump was “OK” after the incident and that he was rushed off the stage. One rally-goer was shot and killed, and the gunman was shot and killed by the US Secret Service.
Strategists had been expecting a volatile run-up to the November election, largely because Democrats are still struggling to wrap their heads around President-elect Joe Biden’s candidacy after his performance in last month’s debates. Investors were also fretting about the possibility that the election could end in drawn-out contention or even political violence.
But events like Pennsylvania’s are almost unprecedented. When President Ronald Reagan was shot 40 years ago, the stock market fell and closed early. The next day, on March 31, 1981, the S&P 500 rose more than 1%, while the yield on the benchmark 10-year Treasury note fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Marko Papic, chief strategist at California-based BCA Research, said bond investors should pay particular attention to the attack because it likely increases Trump’s chances of winning the election.
“I believe that at some point the bond market will realize that President Trump has a better chance of winning the White House than any of his rivals,” Papich wrote, “and I continue to believe that as his odds increase, so too should the likelihood of a bond market rally.”
Kyle Rodda, senior financial markets analyst at Capital.com, said clients were pouring funds into Bitcoin and gold following the shooting. Cryptocurrencies rallied after the news broke.
“This news signals a turning point in U.S. political norms and the urgency of escalating political violence,” he said. “For markets, this means a safe-haven trade, but with a bias towards non-traditional safe-haven assets.”
