The stock market surged following the attempted assassination of President Trump. Experts feel that we may see a red wave in November. Its worth remembering, however, that many experts said the same thing in 2022.

From USA Today. A green, not red, wave swept over the U.S. stock market on Monday as investors placed bets that not only would former President Donald Trump win the White House in November, but he’d carry Congress with him, analysts said.

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Have you taken your place on the wall?

The Dow Jones Industrial Average closed at a record high 40,211.72 while the broad Standard & Poor’s 500 index touched the all-time high of 5,666.94 during the session after Trump survived an assassination attempt at a rally over the weekend. The failed assassination gives Trump strong momentum going into the Republican National Convention (RNC) on Monday in Milwaukee, Wisconsin, and that’s spilling over into hopes Republicans can win Congress, analysts said.

A Republican sweep of the White House and both chambers of Congress would potentially give Republicans an easier time of passing “business friendly” legislation, they said. If businesses do well, their stock prices usually rise. …

What a red wave could mean for businesses (and stocks)?

• Less regulation. “We are seeing a glimpse of how market players want to express a Trump Presidency – and clearly, that outcome is positive for U.S. equity, notably with promises of deregulating industry, which would be a strong positive kicker,” said Chris Weston Head of Research at trading platform Pepperstone.
• Lower taxes. The last major tax legislation by the Trump administration was Trump’s Tax Cuts and Jobs Act of 2017 (TCJA), which included a cut in the top marginal corporate tax rate to 21% from 35% and larger deductions for business investments. …

Critics warn, though, extending TCJA tax cuts would result in a soaring deficit, which is generally seen as bad for the economy and American consumers. …

Will Trump’s momentum keep stocks rallying?

“Markets are emotionally driven,” said Matt Chancey, a certified financial planner in Florida. “Any time there’s an assassination attempt, it’s always favorable to the person who’s being targeted.”

President Ronald Reagan’s approval rating soared about 10 points after John Hinckley Jr. tried to assassinate him in 1981.

But those bumps aren’t reliable long-term indicators for the stock market.

“How people will feel next week, I have no idea,” he said. …

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(Excerpt from USA Today. Photo Credit: Ajay Suresh from New York, NY, USA – NASDAQ MarketWatch, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=88233788)