Take away from 1st US Presidential Debate, effect on ASX stocks?

Summary

• The first edition of the US Presidential debate that took place on 29 September in Ohio turned out to be a shout fest between President Donald Trump and his Democratic opponent Joe Biden.
• The strenuous debate resulted in bearish stock markets with major ASX indices ending the trading session in the red zone.
• While ASX 200 closed below 2.29%, the All Ordinaries index lost 2.15%.

Ahead of the crucial elections in the US, President Donald Trump and his Democrat opponent Joe Biden indulged in the first edition of debate on 29 September 2020 in Ohio. Nevertheless, the debate soon turned out to be a chaotic dispute featuring political and personal jibes to the extent that even the moderator Chris Wallace was not spared and was attacked several times by both Trump and Biden.

One of the most significant political actions of this year, the US elections will take place on 3 November 2020. Setting the stage for the same, Trump and Biden tried to justify their candidature in this debate.

Highlights from the debate

• There was no handshake between Trump and Biden on stage because of the Covid-19 constraint, but they did not even engage in customary greeting in their addresses.
• At the presidential debate, Biden says Trump has no healthcare plan as over 7 million in the US have contracted Covid-19.
• Joe Biden highlighted that whatever Trump has done has been proved disastrous for the African-American community.
• Trump said he had paid millions of dollars in federal income taxes while Biden attacked Trump saying that he pays less tax than a schoolteacher.
• Biden pointed out that 1 in 1,000 African Americans died because of the COVID-19 infection, and if Trump refrains from doing anything quickly, the numbers may become 1 in 500.
• Democrat Biden labelled Trump a liar and a clown during the heated debate.
• Trump attacked Biden’s family by saying that his son Hunter has garnered huge illegal profits from different nations, including China. To this, Biden replied by saying, ‘his family, we could talk all night’.
• Trump went on to criticize India, China and Russia and said that these countries do not give a straight count of how many people have died due to coronavirus there.
• Trump raised worries over the mail-in ballots and said that there are chances that the voting gets influenced.

Must Read: Clean Sweep for Biden anticipated, how is Wall Street placed?

The effect on the ASX stocks

Shares in the Australian stock market plummeted dramatically after the strained US Presidential debate. The ASX incurred huge losses and ended at 5,815.90, down by 2.29%, losing A$40 billion overall. The All Ordinaries index too lost 2.15%. Both the indexes had somehow managed to make up for the losses during the day after reports of bettering economy came from China.

Almost all the indices on the ASX were severely hit. Out of the ASX 200, 183 stocks settled lower, six closed stable, and just 11 ended bullishly.

Shares of oil companies were most hit. As investors showcased apprehension in taking risks, oil prices declined with Brent crude oil decreasing by 2.96% on 29 September and increased by ~1% the following day.

Miner stocks and banking stocks displayed bears. S&P/ASX 300 Metals & Mining closed 2.31% below and S&P/ASX 300 Banks witnessed a ~2% decline. Commonwealth Bank of Australia (ASX:CBA) declined 2.17%, and Australia and New Zealand Banking Group Limited (ASX:ANZ) closed below 2.05%. Miner BHP Group Limited (ASX:BHP) ended in deep red and declined by 3.50%.

ALSO READ: How Is Wall Street Poised Ahead of Presidential Elections & Mixed Economic Signs?

What lies ahead?

Coronavirus crisis, along with presidential uncertainty, have led to a tensed air amid investors. The impending US elections and the vacant Supreme Court seat post the passing away of former Justice Ruth Bader Ginsburg, has led to further apprehensions among investors. President Trump’s testing positive for COVID-19 on 2 October also led to a bearish stock market.

However, post reports on Trump’s improved health and expectation of a new stimulus package, markets bounced back on 5 October. Dow Jones Industrial Average Index increased by 1.68%, recording a one month high. S&P 500 experienced a 1.8% uptick while NASDAQ Composite Index closed above 2.32%.

Conclusion

The first face-off between Biden and Trump had been a shout fest with each pointing out the negatives of the other while stressing on their agenda points. While Biden is trying to target the poor Americans in his agenda, President Donald Trump intends to facilitate more growth in the economy through employment back.

Both the contestants have framed policies concerning tax code and spending to augment the US economy through several initiatives. Nonetheless, the suggested policies and the impending elections may continue to tease the market for the time being.

Interesting Read: Clean Sweep for Biden anticipated, how is Wall Street placed?