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The chance of one Donald Trump The victory appears to have a significant impact on emerging market stocks, which suffered their worst monthly decline since January.
What happened: The possible implementation of Trump’s proposed tariff plan is raising concerns. A recent report points to a four-day straight decline in the MSCI Emerging Markets Index. This represents a decrease of 3.1% this month.
Big companies like Samsung, Alibaba, TencentAnd Meituan are the hardest hit and are responsible for more than half of the index’s decline.
According to the report from Markets Insider, now that the elections are in two weeks, the market is increasingly taking into account a Trump victory.
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On the crypto betting market Polymarket, Trump’s odds of winning shot up to 66% on Tuesday, the highest since President Joe Biden was in the running in July. These odds have since dropped slightly to 62%.
Trump’s proposed tariff plan, which proposes raising tariffs on imports from all countries to 20% and imposing a 60% tariff on imports from China, has stoked investor fears of a damaging trade war.
Citi Bank analysts have noted that the outcome of the election is prompting investors to withdraw from emerging market stocks due to growing uncertainty.
Other factors, such as escalating geopolitical tensions in the Middle East and a bond market sell-off, are also causing investors to avoid riskier assets.
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Why it matters: The potential return of Trump’s aggressive trade policies is causing unrest among investors. His proposed tariff plan could lead to a damaging trade war, especially with China, which would likely have a negative impact on global trade.
This, combined with other factors such as rising geopolitical tensions and a bond market sell-off, is causing investors to shy away from riskier assets, including emerging market equities.
The uncertainty surrounding the election results only increases these concerns.
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