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There is new news about the US election!

According to the latest news, US Vice President Harris issued a statement on the 22nd local time saying that she has received enough support to become the Democratic presidential candidate. According to AFP, she is "proud" of having received enough support from Democratic delegates to win the Democratic presidential nomination. "I look forward to formally accepting the nomination soon," Harris said in a statement, adding, "I am proud to have received the broad support needed to become the nominee."

On the 22nd local time, US President Biden said that he had decided to withdraw from the election and that he had done the "right thing" and that he would participate in the campaign of Vice President Kamala Harris. Biden also called on the staff of the campaign team to "embrace" Harris. This was Biden's first public comment since he gave up his re-election campaign last Sunday. Biden said that he would do his best to perform his duties in the last few months of his presidency.

On the same day, Biden's doctor issued a statement saying that after receiving treatment, Biden's new crown symptoms basically subsided that day. Biden's heart rate, blood pressure, breathing, body temperature and other indicators are completely normal, and he will continue to handle presidential affairs as usual.

In the capital market, on the first trading day after Biden announced his withdrawal from the election, the three major U.S. stock indexes rose collectively, with the Nasdaq and S&P 500 rising by more than 1%. Investors began to turn to the technology sector again, with Nvidia rising by nearly 5%, and the stock's market value increasing by US$137.9 billion (equivalent to about RMB 1 trillion) in a single day. In addition, Tesla rose by more than 5%, Google and Facebook rose by more than 2%, and Microsoft rose by more than 1%.

Biden's latest statement

On July 22, local time, US President Biden said that he would participate in the campaign of Vice President Kamala Harris. When talking about his decision to withdraw from the election, Biden said that this was the right choice.

In his first public comments since abandoning his reelection bid on Sunday, Biden convened Harris for a meeting at the joint campaign headquarters in Wilmington, Delaware, according to The New York Times. He thanked his "amazing team" for all the work they've done for him and implored them to now turn their attention to Harris.

Biden told staff at his campaign headquarters that day, "I know yesterday's news was surprising and it's hard for you to accept, but it's the right thing to do." Biden told the campaign team: "The name at the top of the ballot has changed, but the mission has not changed at all. By the way, I'm not going anywhere. I'll run on the campaign with Harris. I'll work hard, whether it's pushing legislation through as an incumbent president or running for office. You know, we still need to save this democracy, and Trump is still a threat to the community. He's a threat to the country." The report said that Biden seemed determined to convey this message, repeating "not going anywhere" three times in a four-minute speech.

Biden said he wants to use his remaining time in the White House to fight for more child care, lower the cost of prescription drugs, curb climate change and end the Gaza war. Biden is expected to hold talks with Israeli Prime Minister Benjamin Netanyahu at the White House later this week and expressed optimism that a ceasefire is imminent. "I think we're on the verge of being able to do that," Biden said.

On the afternoon of July 21, Eastern Time, US President Biden announced his withdrawal from the 2024 presidential election and expressed his support for nominating Vice President Harris as the Democratic presidential candidate. Biden said that he had intended to seek re-election, but for the "best interests" of the Democratic Party and the United States, he decided to withdraw from the presidential election and focus on completing his presidential duties during his term. Harris later issued a statement saying that she was "honored" to receive Biden's support.

After Biden announced his withdrawal from the race, Republican Speaker of the U.S. House of Representatives Mike Johnson issued a statement urging Biden to resign immediately from the presidency. In response to some members of the Republican Party asking Biden to step down immediately, Biden said on July 22 that he would do his best to perform his duties in the last few months of his presidency.

Last week, Biden was infected with the coronavirus again and showed mild symptoms. He was isolated at home in Delaware and worked from home. On July 22, local time, Biden's doctor issued a statement saying that Biden's coronavirus symptoms had basically completely subsided that day after receiving treatment. Biden's heart rate, blood pressure, breathing, body temperature and other indicators are completely normal, and he will continue to handle presidential affairs as usual.

Harris delivered a speech

On July 22, Harris delivered her first campaign speech at her campaign headquarters in Wilmington, Delaware, saying she would use her experience as a prosecutor to "deal with" Republican presidential candidate and former President Trump. She also said that she "knows Trump's type."

According to Reuters, Harris said in her speech that day: "I have dealt with all kinds of criminals. There are people who abuse women, scammers who deceive consumers, and scammers who break the rules for their own selfish interests. So listen to me, I know Trump's type. In this campaign, I will proudly use my experience to deal with him." According to the report, before becoming Biden's vice president, Harris served as California Attorney General.

Harris also praised Biden's political achievements. She said Biden's performance in one term has surpassed the achievements of most presidents who have been re-elected for two terms. She added that Biden also wanted to be here today, but was absent due to infection with the new coronavirus; in addition, Biden feels much better and is recovering quickly from the new coronavirus.

Biden's endorsement of Harris has triggered a wave of support from his Democratic colleagues, including former President Clinton and former Secretary of State Hillary Clinton, Progressive Caucus Chairman and Washington State Representative Jayapal, Wisconsin Senator Baldwin and others.

After Harris' speech, several Democratic lawmakers, including Pelosi, expressed their support for Harris. Pelosi, 84, said in a statement: "With love and gratitude, I salute President Biden, who has always believed in the possibilities of America and given people the opportunity to realize their dreams. We must unite and move forward to completely defeat Trump and elect Harris as the next President of the United States."

Pelosi also said that Harris is very politically savvy as a woman and she fully believes that she can lead the Democratic Party to victory in the presidential election in November.

Almost all the prominent Democrats who were once seen as potential challengers to Harris have said they would support her, including Michigan Governor Gretchen Whitmer, Kentucky Governor Andy Beshear, California Governor Gavin Newsom and others.

At the same time, U.S. Senator and independent Joe Manchin of West Virginia said that he would not run for U.S. president and that the Democratic presidential candidate should be selected through competition.

CITIC Securities analysts Yang Fan and Yao Yuan said that Harris is currently the 49th Vice President of the United States and the first African-American woman to hold this position. Her policy stance was fully demonstrated in the 2020 Democratic primary. She is slightly more left-wing than Biden and has closer ties with the Democratic progressives. Her economic issues focus on equality, her diplomatic issues emphasize so-called "values", and her social issues support abortion, gun control and other propositions.

Overall, the Democratic Party's "change of leadership" at the last minute is mainly due to the collective "fear" of Trump's return to the White House and the "red wave" sweeping Congress. However, facing the pressure of Trump's campaign, Harris's voter appeal may not be able to quickly and significantly surpass Biden's, and the expectation of "Trump's return" may continue. In the future, we need to pay attention to the nomination situation of the Democratic National Convention in August and the performance of the Democratic candidates in the presidential debate in September.

Will Trump's rising chances of winning push up US stocks?

On Monday (July 22), U.S. tech stocks rebounded, with the tech-heavy Nasdaq up 1.58%. Some analysts said this was mainly due to Biden's announcement that he would not seek re-election and his subsequent support for Harris, as experts said the market had readjusted its expectations for Trump's victory - although the impact on stock price movements is likely to be short-lived.

On that day, most US technology stocks rose, with Netflix, Google, and Facebook up more than 2%, and Microsoft up 1.33%. Chip stocks were even stronger, with Applied Materials up more than 6%, ASML up more than 5%, Nvidia up 4.76%, Qualcomm up 4.7%, and Intel up more than 1%.

Lori Calvasina, head of global equity strategy research at RBC Capital Markets, said in a report on Monday that Biden's decision brought new surprises to investors who are trying to understand how political news will affect the stock market in 2024. Investor confidence in the next presidential candidate has become a key driver of the stock market recently. In particular, when the betting market showed that the probability of former President Trump winning the November election increased, the stock market also rose, and the S&P 500 reached a recent high around July 16.

Calvasina further analyzed that if the momentum of the election shifts back to the Democratic Party, based on historical data, this may cause a short-term correction in the stock market. However, if Trump's lead widens, the stock market may avoid the expected correction, although this pattern may not be sustainable.

Mazza, CEO of Roundhill Investments, stressed that investors should expect greater volatility if the new Democratic candidate leads the market to expect a more intense presidential race. He also mentioned that the market could be quite chaotic in the coming week due to the upcoming earnings of large technology companies, the release of economic growth and inflation data, and continued political turmoil.

Maza believes that while there may be a lot of macro news in the short term, corporate earnings will ultimately be the long-term driver of the market. As for how investors should think about the possibility of a Trump-Harris confrontation, Wall Street's initial reaction suggests that investors should remain on the sidelines.

Tom Essaye, founder of the Sevens Report, wrote in a note to clients that the impact of shifting expectations about the November election on the stock market is likely to be "very short-term" because more immediate influences such as corporate earnings growth and interest rate changes are likely to affect stock prices more directly.

Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said in a latest report on Monday that as traders expect the Federal Reserve to cut interest rates later this year, funds have recently flowed out of U.S. technology giants and turned to some stocks that have lagged behind in the previous performance. This trend looks set to continue, but the fundamentals still do not support chasing up small-cap U.S. stocks.

Shalett warned against chasing small-cap stocks because their gains may not be sustainable. The lagged impact of rate cuts and the overrepresentation of unprofitable companies in the small-cap index have left small-cap stocks lacking tailwinds. The profitability issues of this group are unlikely to be solved by a 75 basis point rate cut. Specifically, large-cap, high-quality cyclical stocks are Morgan Stanley's top picks, including financials, energy, industrials, aerospace, defense, some power generation, grid infrastructure, etc.

Source: China Securities

Statement: All information content of Databao does not constitute investment advice. The stock market is risky and investment should be cautious.

Editor: He Yu

Proofreading: Yang Lilin

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