Skybridge’s Anthony Scaramucci says a second Trump presidency would be the ‘Holy Trinity’ for a bruised stock market

A Trump presidency in 2024 could help squeeze battered stock markets, according to former White House communications director Anthony Scaramucci, but he cautioned about his former boss’ tendency to shake political stability.

Former US President Donald Trump announced Tuesday night from his Florida estate that he was launching a third campaign for the White House.

“I run because I believe the world has not yet seen the true glory of what this nation can be,” he told an audience at his Mar-a-Lago club.

Speaking to reporters at a conference in Singapore on Wednesday, Anthony Scaramucci, the founder of Skybridge Capital who served as Trump’s communications chief before being fired after just 10 days, predicted the former president’s upward trends could help revive the financial markets.

“It is the holy trinity of market lubrication,” he said, in remarks reported by the Reuters news agency. “Stimulus, through deficit spending, low interest rates – easy money – and lack of regulation.

However, Scaramucci acknowledged that Trump has also threatened to create volatility in markets that have already suffered a year of shaky ground.

“The downside is [investors] also know that it creates what the markets absolutely hate: political instability,” he said. “If any of those other candidates can come along with some of the Trump messaging without the Trump drama, there could be opportunities.”

Throughout his presidency, Trump has often taken to Twitter to celebrate the strength of the US stock market. In his first two years in office, Trump tweeted at least 60 times about the stock market, according to CNBC, often taking credit for his successes.

“Traffic Traffic in Washington”

Markets have so far had a weak response to Trump’s widely anticipated announcement, with US stock futures easing slightly on Wednesday and European markets reacting to a missile that crossed the Ukrainian border and exploded on Polish territory.

In a note Wednesday, Matt Simpson, market analyst at Australia’s City Index, said that at this stage, the biggest question on investors’ minds was whether Trump’s presidential bid would split the Republican party and inadvertently deliver to Democrats “an easy win.”

Simpson noted that Trump was “probably just preparing for what could be another 2 turbulent years (at least) for US politics,” but admitted that a lot could happen before the 2024 vote.

“If inflation is not under control, it will put the Dems in a very weak position by the election,” he said.

“However, it’s a long and arduous road to the White House and Trump currently wields no presidential powers, so it may take some time for markets to catch on, which is why they probably haven’t shown any significant reaction today, from a announcement that all of us fully anticipated”.

This was stated by Edward Moya, senior market analyst at OANDA Fortune that Trump’s candidacy is unlikely to do the Republican party or US stocks any big favors right now.

“Republicans are divided and that is reducing the odds that they will take over the White House in 2024. If President Trump does not announce this, the expectations for the Republican Party to deliver a red wave in 2024 are likely to be much better,” he said. stated. he said.

“If Wall Street expects a candidate like Ron DeSantis to be the favorite to win the nomination, you could see a strong case to be aggressive with US equities,” Moya added. “Gridlock in DC, however, will be the price traders value over the next couple of years, which means the only thing that matters right now is the path of inflation.”

Meanwhile, Padhraic Garvey, regional research manager for the Americas at ING, said market performance in the wake of the upcoming presidential election will be about the economy, not the winning candidate.

“By late 2024 and early 2025, the Fed will likely have made a series of rate cuts that help revive an economy that had been subdued by previous (current) hikes,” he said Fortune on Wednesday. “The likely positive shine on growth, non-inflationary this time around, may be good for markets. This more than anything else could be a motivation for markets to do better after the 2024 presidential election, for all candidates.

For Trump in particular, Garvey said, market performance will depend in part on scrutiny from both houses of Congress.

“If it did, markets could anticipate a more pro-business and anti-deregulation mix that could be seen as good for corporate America. Or at least the markets could postulate that as a possible outcome,” she said.

“If it didn’t, its sphere of influence would tend to be directed towards international affairs, which could go either way in terms of its impact on the market. Markets tend to prefer a divided administration, as it tends to be less intrusive. But Trump’s version would likely be confrontational based on his previous performances.

This story was originally published on Fortune.com

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