Financial markets shrug off potential Harris run for now
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Sunday's seismic decision from President Biden to end his re-election campaign barely registered across financial markets Monday.
Between the lines: After an initial jolt, investors — and the prediction markets — didn't budge from bets based on former President Trump winning in November.
- "Either there's too much uncertainty or markets don't think this changes the outcome very much," Callie Cox, chief market strategist at Ritholtz Wealth Management, told Axios in an interview.
Flashback: The lack of market reaction Monday stands in contrast to last week, when, following the attempted assassination of former President Trump, investors leaned into bets designed to benefit from a second Trump administration.
The big picture: Vice President Kamala Harris is the clear frontrunner at the moment to replace Biden on the Democratic ticket.
- But it's not yet clear how policies of a Harris administration might differ, if at all, from the one she previously shared with Biden.
What we're watching: "If I had to pick one policy that should be at the forefront of investors' minds, it should be tax policy," said Cox.
- Trump has been talking about more tax cuts if he wins. Exactly where Harris stands today on the issue remains to be seen, but in the past she's supported higher rates on corporations.
- According to Cox: Consumer discretionary, materials, industrials, communication services, consumer staples and energy have the highest effective tax rates among sectors of the economy, and could therefore be the most sensitive to tax policies.
