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The stories that matter about money and politics in the race for the White House
Bitcoin surged on Monday following the assassination attempt on Donald Trump, as traders increasingly bet on the former president’s victory in the US presidential election in November.
Bitcoin price rose more than 10 percent to $63,595, its highest level in two weeks, after Trump suffered an ear injury in an assassination attempt by a gunman at a campaign rally over the weekend. The Republican is seen as the more pro-crypto candidate after he hosted industry executives at Mar-a-Lago and expressed enthusiasm for U.S.-based bitcoin mining.
Trump’s campaign has also accepted payments in cryptocurrencies, a first for a major U.S. political party, raising hopes for an end to the stringent U.S. regulations on the sector in recent years.
“The chances of a Donald Trump victory have increased significantly,” said Grzegorz Dróżdż, market analyst at currency firm Conotoxia, adding that a Trump presidency would have a “positive impact” on crypto.
Implied odds of Trump winning in November rose shortly after the shooting, according to live trading on political betting site PredictIt.
Shares in Trump’s Truth Social media company closed up 31 percent. Trump Media & Technology Group, which reported an operating loss of $98 million for the three months ended March 31, went public that month in a merger with a blank-check company and recently rebounded ahead of last month’s debate between Trump and President Joe Biden.
Prison administrators gained, with shares of Geo Group rising nearly 10 percent and CoreCivic adding 8 percent. Shares of U.S. gun makers also rose. Sturm Ruger & Co gained as much as 12 percent, while Smith & Wesson Brands rose as much as 14.3 percent.
“For prison stocks, the expectation is that if Trump wins, he’s going to be stricter on the border and those companies are going to benefit from that,” said Michael O’Rourke, chief market strategist at JonesTrading, who was less convinced that guns were an obvious Trump-related trade. “Gun stocks are always volatile around the election cycle and it usually ends up being just a lot of noise in the market.”
The S&P 500 closed up 0.3 percent on the day, but remained just shy of a new record.
“A presidential candidate surviving an assassination attempt is good news in itself. [Monday] “It was a fair reaction,” O’Rourke continued. “But I don’t think stocks are going to make a multi-percentage point run here just because Trump is now favored to win the election by a bigger margin than he was before.”
The fading chances of a second Trump presidency did send ripples through broader financial markets, however. U.S. Treasury yields rose slightly in a more muted version of the reaction that followed Biden’s disastrous debate performance.
Many investors believe Trump’s tax cuts will increase deficits and inflation, which will impact U.S. Treasuries and send interest rates higher in a pattern similar to the aftermath of his 2016 election victory.
The U.S. dollar index, which tracks the greenback against a basket of six other major currencies, was steady. But it weakened in July as traders increased their bets on a rate cut by the Federal Reserve in September.
Yields on key 10-year government bonds rose 0.04 percentage points to 4.22 percent, reflecting a slight drop in prices.
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The movements of Monday “chimes”[s] with the Trumpian theme, given the popular narrative that he is good for business and… his pro-crypto stance,” Rabobank analysts said in a note to clients.
“For markets, the complexities of the US political backdrop have been reduced to the assumption that the weekend’s events will increase the likelihood of Trump winning the November presidential election,” they added.