Does tonight’s debate matter?
Tonight marks the first debate between the Democratic Nominee and the Republican Nominee.
Now, that might be confusing since the first debate already happened, but in case you haven’t heard, there have been a few shake ups as of late.
The big question is whether the debate will impact the market.
As a spoiler alert, let me say up front, I don’t think it will have a major effect unless one of the candidates proposes something significantly outside their expected policy point of view.
In reality, the election is close to a coin flip based on recent expectations so even if one side made a big push for a policy that would impact certain stocks, we can only price that in so much given that candidate would have about a 50% chance of winning to even make such a policy matter.
On top of that, the scenario where one party has complete control of the White House, House and Senate is quite unlikely so the more extreme the policy, the less likely it would be to make it through.
There are a couple of things to keep an eye on though.
If Trump makes the RFK campaign issues front and center, that will be very interesting and could affect some sectors like big pharma.
If Kamala takes a more aggressive stance on energy, we could see some impact there.
If we get any kind of synergy among the two candidates, pay close attention to that.
An example of this would be that they surprisingly align on using the military in a certain conflict… Keep an eye on defense stocks if that happens.
In my opinion, most of these scenarios have 3 things going against them:
- They’re not extremely likely
- They can only be priced in to a certain extent when only one party can win
- The likelihood that they go from talking points to real policy months from now is not high
So “will the debate impact the market?” … Sure, it will cause some gyrations here and there.
I don’t expect it to set the tone for the overall stock market in a meaningful way.
But, hey, it should be entertaining – at least we have that going for us in recent years.
— Nate Tucci
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