Trump assassination attempt won’t stop record run on ASX and US markets

The attempted assassination of Donald Trump may give investors cause for a pause on Monday but it’s unlikely to stop the ASX from breaching 8000 points for the first time.

Traders work on the floor of the New York Stock Exchange (NYSE) on July 11, 2024 in New York City. Picture: Spencer Platt/Getty Images/AFP (

Political upheaval in the wake of the attempted assassination of Donald Trump will likely cause investors to apply the brakes on Monday but not prevent the S&P/ASX 200 from breaching 8000 points for the first time.

The futures market earlier indicated the benchmark S&P/ASX 200 was set to open 0.6 per cent higher, before the shooting at Trump’s campaign rally in Pennsylvania over the weekend. However, AMP chief economist Shane Oliver said that given the uncertainty as to how Wall Street will react, it was likely that Australian shares would not perform as strongly as originally expected.

Dr Oliver said it was hard to know whether the suspected assassination attempt would have any significant impact on markets.

“I wouldn’t think so – because he is not the president,” he said. “And even if he does win the election (in November) he is not president until January, so it doesn’t have any immediate policy implications.”

Traders work on the floor of the New York Stock Exchange (NYSE) on July 11, 2024 in New York City. Picture: Spencer Platt/Getty Images/AFP

The S&P/ASX 200 soared to a new closing peak of 7959.3 points on Friday, just 40 points shy of the psychologically important 8000 point milestone.

All three major US indices also climbed. The blue chip Dow Jones broke through 40,000 points to set a new record as traders increasingly expect the US Federal Reserve to soon cut interest rates.

Dr Oliver said inflation and interest rates would remain the key focus of global markets. He said that, to date, share and investment markets had not been particularly focused on the US election race.

But Dr Oliver noted there were aspects of Trump’s policies that investors would regard as ‘‘quite negative”.

“The tariff increases ... and immigration policies could increase inflation,” Dr Oliver said.

“If we do see an increase in poll support for Trump it could heighten the market’s focus on a Trump victory and the potential inflationary consequences of that. But there is still a long way to go before the US election. There will be a lot more twists and turns.

“But no one likes political uncertainty.”

Friday’s US share rally came despite disappointing US inflation data and a lacklustre market reaction to American bank earnings.

AMP chief economist Shane Oliver.

But the data was not bad enough to overshadow Thursday’s benign consumer price index report that boosted expectations of US rate cuts, analysts said. Last week US Federal Reserve chairman Jerome Powell indicated that the central bank did not need to wait for inflation to fall to its 2 per cent target to begin lowering interest rates.

“Despite US producer prices coming in hotter than expected, most European and US stock indices ended the week on a positive note, as investors are convinced a September Fed rate cut is on the cards,” said Axel Rudolph, a senior market analyst at online trading platform IG. Figures due for release this week in the US include retail sales, business inventories and the home builder confidence index.

“The evidence (with data) so far is that the US economy is slowing down,” Dr Oliver said.

“The worry is that if the data is too weak people will start worrying about a recession.”

Investors will also remain focused on the second-quarter earnings season in the US.

Wells Fargo shares sank 6 per cent on Friday as it reported lower profits, due in part to a decline in net interest income. Both Citigroup and JPMorgan Chase also fell more than 1 per cent.

Citigroup chief financial officer Mark Mason pointed to a “bit of a pullback” from consumers with lower credit scores who were suffering from higher interest rates and the consumer price hikes of recent years.

“The customer base is being discerning in terms of the nature of the spend, in light of the environment that we’re in,” Mr Mason said.

BlackRock, Goldman Sachs, Bank of America, Morgan Stanley and American Express are all due to report this week.

Locally, unemployment figures on Thursday will be the most analysed data.

AMP expects it to show 25,000 jobs were created in June and that the unemployment rate lifted to 4.1 per cent, from 4.0 per cent.

“If we get another tick up in the unemployment rate it would be consistent with the labour market cooling and it would be consistent with the argument that the Reserve Bank will keep interest rates on hold,” Dr Oliver said.

“The CPI figures in a few months will be key.”

He said economic statistics due from Beijing on Monday, including GDP and retail sales figures, were likely to show a slowing in the Chinese economy.

“Weak numbers might increase pressure on (Chinese government) to step up policy stimulus.”

Originally published as Trump assassination attempt won’t stop record run on ASX and US markets