Back in December 2023, I made a prediction about the presidential election that a lot of people found “shocking,” “unbelievable,” and even “crazy.”

I predicted that President Joe Biden would drop out of the 2024 presidential race.

Regrettably, I find myself saying, “I told you so,” as this is precisely what happened.

My insights into Biden stem from observation rather than medical expertise. Quite frankly, he didn’t seem to be operating at full capacity.

With over four decades of experience in the market, I’ve encountered numerous influential figures in Wall Street and Washington D.C. I’ve seen enough to recognize potential changes in leadership dynamics.

Understanding how these power players operate behind the scenes led me to conclude that a “shadow” campaign was underway to remove Biden from the race.

Interestingly, I even anticipated a left-leaning Democrat from California would take his place, but I chose the wrong candidate; it became Vice President Kamala Harris instead of Governor Gavin Newsom.

One thing is clear: I could never have foreseen the wild path this presidential election has taken.

Consider former President Donald Trump. He was impeached twice in 2019, has been found guilty of several felonies, and currently faces numerous indictments and court cases. Notably, on July 13, a would-be assassin attempted to shoot Trump in Butler, Pennsylvania, narrowly missing him. As if that wasn’t enough, on September 15, he faced a second assassination attempt near his club in Palm Beach, which is quite close to my residence.

Meanwhile, Vice President Harris has emerged as the primary candidate due to Biden’s exit and his endorsement of her. This swift transition has left voters annoyed at the lack of a traditional primary process, which has stifled their voices.

On the other hand, RFK Jr. aimed to run as an independent, potentially splitting votes between candidates. However, he unexpectedly withdrew from key swing state ballots on August 23 and endorsed Trump.

Thus, voters now have to choose between Trump and Harris.

Implications of the “Trump Trade” in Today’s Market

I don’t intend to stir controversy with political commentary. However, as the election approaches in less than two weeks, the uncertainty surrounding the next U.S. president is affecting the stock market.

Take, for instance, the recent surge in Treasury yields.

Over the past five weeks, interest rates have increased significantly, putting downward pressure on the stock market recently.

This week, the 10-year Treasury yield reached as high as 4.25%, while the two-year yield hit 4.07%. These levels are the highest we’ve seen since early summer, having risen sharply since the Federal Reserve cut key interest rates in September when the 10-year Treasury yield was around 3.6% and the two-year was at 3.65%.

A primary catalyst for this seems to stem from Europe and the “Trump Trade.” This term signifies how traders perceive Trump’s chances in the election. Thus, as Trump’s prospects appear to improve, traders in Europe grow increasingly concerned about the U.S. budget deficit, the potential for inflation returning, and other economic policies that could escalate long-term rates.

The current budget deficit stands at $1.38 trillion, and an increasing portion of our tax revenue goes towards servicing the $35.7 trillion national debt.

The situation is deteriorating. Though the bond market may be anxious about a Trump presidency, the fundamental challenges of our spending habits will remain regardless of who wins the presidency.

The unfortunate reality is that neither candidate seems willing to confront the gravity of the situation. Both are engaged in promises to appease voters, offering initiatives that will likely exacerbate the financial deficit.

This environment is why prominent investor Paul Tudor Jones warned on CNBC recently that the U.S. is heading toward financial ruin unless we seriously address our spending issues. He acknowledged that the bond market could compel the forthcoming president to take action.

Advice for Investors Moving Forward

In summary, this election cycle is generating a wave of uncertainty, political discord, and market fluctuations.

After election day, I anticipate that volatility will increase further, potentially resulting in wild swings in the market. These fluctuations could stem from a contested election, an upheaval in the bond market, an unexpected Federal Reserve move, or visible conflicts abroad in places like the Middle East or Ukraine, or a combination of these factors.

However, there’s a silver lining: unexpected and chaotic circumstances can present opportunities to gain years’ worth of profits in just a few months.

That’s why I’m hosting a “Day After Summit” with The Freeport Society’s Chief Investment Strategist, Charles Sizemore, on Tuesday, October 29, at 7 p.m. Eastern time.

My goal is to help you take advantage of the impending market chaos.

Charles will share strategies to track the moves of influential Wall Street investors, guiding you in leveraging the forthcoming volatility for profit.

In fact, Charles will be providing a free post-election trade, intended to yield returns no matter who emerges victorious.

Reserve your spot now.

Sincerely,

Louis Navellier

Editor, Market360