Bloomberg: US Stocks Rise as ‘Trump Trades’ Take Hold, Small-Caps Rally

July 14, 2024

U.S. stocks closed higher on Monday as investors reacted to the attempted assassination of former President Donald Trump and anticipated a busy earnings week. The S&P 500 and Nasdaq 100 each rose 0.3%, while the Dow Jones Industrial Average increased 0.5%, hitting an all-time high. The Russell 2000 saw a significant gain of 1.8%, marking its best four-day run since November 2020.

Michael Landsberg, CIO of Landsberg Bennett Private Wealth Management, highlighted the increased market risk and reduced liquidity due to the attack on Trump, emphasizing the importance of keeping cash reserves.

“This weekend’s development was one of the reasons why we have some cash on the sidelines and encourage our clients to always keep some cash stashed away,” Landsberg said. “The attack can undoubtedly raise the overall risk of the stock market and reduce liquidity.”

Investors are also watching earnings reports and economic data to gauge the Fed’s policy direction. Stocks in sectors like banks, private prisons, and firearms saw gains, while renewable energy stocks declined.

Trump Media & Technology shares surged, and Bitcoin saw a significant rise, reflecting market reactions to Trump’s higher reelection odds.

Key Takeaways:

  1. Market Reactions: Major indexes closed higher as investors weighed the implications of the assassination attempt on Trump and looked forward to earnings reports.
  2. Increased Market Risk: Michael Landsberg noted that political violence can raise market risk and reduce liquidity, advising to keep cash reserves. “This weekend’s development was one of the reasons why we have some cash on the sidelines and encourage our clients to always keep some cash stashed away,” Landsberg said.
  3. Sector Performances: Stocks in banking, private prisons, and firearms saw gains due to Trump’s policies, while renewable energy stocks declined.
  4. Trump Media & Technology Surge: Shares of Trump’s media company soared following the weekend’s events, reflecting increased momentum for Trump’s candidacy.
  5. Earnings Season Focus: Investors are focusing on upcoming earnings reports from companies like Netflix, Johnson & Johnson, and State Street Corp. for market direction.
  6. Bitcoin and Crypto Stocks: Bitcoin and related stocks outperformed, driven by speculation of improved odds for pro-crypto Trump’s reelection.
  7. Treasury Yields and Inflation: 10-year Treasury yields rose in response to the weekend’s events and potential fiscal policy changes under a Trump administration.
  8. Notable Stock Movements: Companies like Apple, Netflix, and TD Synnex saw significant gains, while others like Baxter International and Caesars Entertainment faced downgrades and declines.

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