The U.S. Presidential Election on November 5, 2024, is approaching, and alongside the incumbent Democrat Joe Biden, former President Donald Trump is again running for the Republicans. While the outcome of the election is still open, the markets increasingly seem to be pricing in a Trump victory.

In the run-up to the election, markets have started to calculate the potential impacts of a Trump victory. Particularly after the recent TV debate where Biden was noted for stammering and incoherent sentences, Trump is being considered the more likely winner. This debate, which took place at the end of June, led to a shift in opinion according to CNBC and reinforced the assessment that Trump could triumph in November.

Wall Street heavyweights like JPMorgan, Vanguard, and UBS emphasize that investments should not primarily be driven by political developments. However, market analysts are trying to assess the potential economic impacts of another Trump victory. Mark Malek, Chief Strategist at Siebert AdvisorNXT, speculates that a Trump presidency could mean more inflation and slower economic growth in the medium term.

The markets' reaction to the debate is reflected in the yield curve, which showed an upward trend, while longer-term bonds came under pressure. Morgan Stanley strategists Matthew Hornbach and Guneet Dhingra predict that a Trump victory could slow economic growth and make rate cuts more likely. Short-term bond yields could fall as a result of looser monetary policy, while long-term yields are likely to rise due to increasing inflation and a larger government deficit.

Michael Hartnett from Bank of America identifies technology stocks, banks, and interest rate volatility bets as potential beneficiaries of a Trump victory. On the other hand, energy stocks, emerging market currencies, and real estate owners could be among the losers.

Raymond James Analyst Ed Mills points to potential legislative changes implemented by Trump in his last term, such as tax cuts and deregulation measures. These could benefit financial assets and facilitate more mergers and acquisitions. Additionally, the potential for more inflationary policies under Trump is observed.

Despite these assessments, the election outcome remains uncertain. JPMorgan strategist Meera Pandit advises investors not to let their investment decisions be dominated by political considerations: "There is a fundamental rule that investors should follow: Don't let your thoughts about politics overshadow your thoughts about investing," she is quoted by Fortune.

Ultimately, it remains to be seen how the markets will develop and which political decisions will actually be implemented. Until then, investors should continue to keep their long-term strategies in mind and not be unsettled by short-term political events.