Singapore Market Focus - DBS Research 2024-11-01: Survival Guide For US Election Outcome

• What happens over the next 1-2 weeks may determine the outlook for equities in the month(s) ahead, or even well into 2025.
• The three key events over the next 2 weeks are:
  1. outcome of the US presidential election that influences global trade, interest rates and funds flow,
  2. - Read this at SGinvestors.io -
  3. fiscal policy details at China’s NPC standing committee that could boost or dampen confidence on China’s ability to revive its economy.

A positive end to the year hinges on US election outcome and rates outlook

• A benign US election outcome and tame interest rate outlook should lift the STI to our year-end target of 3750. In contrast, a Republican ‘red sweep’ and a more hawkish interest rate outlook could heighten market volatility, with support seen at 3480 or even as low as 3340. We’ll get a clearer picture very soon.

Brace for the next US president

• - Read this at SGinvestors.io -
• Refer to the The Venn diagram in the report attached below that shows the contrasting and overlapping policies of Donald Trump versus Kamala Harris. One section of this Venn diagram will fall off soon. Investors will swiftly turn their attention to either Kamala 1.0 or Trump 2.0 once the next US election outcome is known. Equity markets should enjoy lower volatility if Kamala Harris wins due to policy stability. But the election remains a very tight race.
• If Republican candidate Donald Trump gets elected, financial markets would have to deal with greater uncertainties such as
  1. a much more elevated level of US-China trade war,
  2. monetary policy independence may be questioned, and
  3. tariffs and tax cuts across the board will drive up inflation concerns.
• Singapore, being an open economy with a small domestic market, will be negatively affected by a trade war.
• Unless the election outcome is a clean sweep where one party controls both the lower house and senate, we believe the new President will find it hard to push through all the campaign promises if there is a split congress.

The potential impact for equity markets under 4 election outcome scenarios:

Republican party 'red sweep'

• Read more at SGinvestors.io.

Kee Yan YEO DBS Group Research | Fang Boon FOO DBS Group Research | https://www.dbs.com/insightsdirect/ 2024-11-01 SGinvestors.io

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