Good morning. On Saturday, Donald Trump survived an assassination attempt by a gunman at a rally in Pennsylvania.

The shooting left one spectator dead and two injured.

This is a serious and troubling development in a high-stakes election cycle. While there are other critical angles to unpack, today we will provide you more context as it relates to markets and investing.

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Trump bets ramp up

Donald Trump has officially survived an assassination attempt. Traders have since turned more bullish on his election odds and a medley of assets tied to the so-called Trump Trade. 

In the immediate aftermath of the shooting, prediction markets spiked in favor of a Trump presidential victory. 

Before the Pennsylvania rally, his odds of beating Joe Biden hovered at 59%, according to Polymarket.

That jumped as high as 71% on Sunday. 

Betting markets can be a more reliable measure for election outcomes because the odds come from people who put money on the line, unlike conventional political polling.

Late Saturday, billionaires Elon Musk and Bill Ackman tweeted their official endorsements for the former president. 

“[The shooting] makes a Trump presidency almost a slam dunk now,” Rhys Williams, chief investment officer at Wayve Capital, told me. “Importantly, he’ll likely take the Senate and House, which is probably a slight negative for bonds.”

Generally, markets tend to prefer a mixed government, as it creates gridlock for policy and regulation.

While a Republican sweep could open the door to less regulation, it could also usher in more spending. 

Stock futures ticked higher in overnight trading. Veteran strategists say they don’t expect dramatic price action or any surges in volatility, though it’s true that there is little precedent for what just happened.

“My recollection when Reagan got shot, who was the sitting president at the time, it was not a huge impact on equity markets,” Williams said. “I don’t think you’ll have a huge reaction in equities.”

That said, shares of Trump Media jumped by double-digits overnight.

Steve Sosnick, the chief strategist of Interactive Brokers, told me he expects any bump in stocks to fade before the election.

Equity markets, Sosnick explained, are “notoriously bad at digesting geopolitical events” that don’t impact earnings and cash flow.

He said he’ll be watching for two specific signals: 

1. Whether VIX futures expand around the time of the election

2. Whether the yield curve steepens as bond traders weigh Trump tariffs and a growing deficit

Meanwhile, riskier and more niche corners of the market showed a brief knee-jerk reaction to the shooting.

The global market cap for all cryptocurrencies climbed nearly 2% in the 24 hours afterward, with bitcoin climbing roughly 2.2%, according to CoinMarketCap data. 

The Trump-themed memecoin, MAGA, rallied about 75% in the hour after news broke of the attack before pulling back the morning after. 

While various markets price in a second Trump term, other factors remain at play. 

Earnings are about to pick up momentum, a Fed rate cut looms, and a rotation into small-cap stocks could be underway. 

“We may get a little rally, a Trump bump if you will, on Monday’s open and could experience intraday volatility all week,” said Jay Woods, chief global strategist for Freedom Capital Markets, in a note early Monday.

“Given the recent rally in the indices, a pullback would be normal. However, every market move will be scrutinized and highlighted with a political backdrop that has reached a boiling point.”

Are you changing any of your existing investments ahead of the election? Hit reply to this email or let me know on X @philrosenn.

*At a glance:

Elsewhere:

💼 Business leaders all over have condemned political violence. After Saturday’s shooting, a wave of executives offered their support for Trump and his safety and recovery. Amazon’s Andy Jassy and Jeff Bezos, Apple’s Tim Cook, and Meta’s Mark Zuckerberg wrote public comments after the assassination attempt. (Yahoo Finance)

🇨🇳 China misses growth expectations. The world’s second-largest economy reported second-quarter GDP growth of 4.7%, weaker than expected and less than the 5.3% seen in the first quarter. June retail sales also missed expectations, while industrial production data was strong. (CNBC)

🤝 Alphabet eyes acquisition of cybersecurity startup Wiz. The Google parent is in advance talks for a roughly $23 billion deal, reports say. If that goes through, it would mark Alphabet’s biggest acquisition ever. (Reuters)

✂️ It’s time for the Fed to cut rates. After the lower-than-expected inflation report last week, some market watchers have floated the idea of a July rate cut. The labor market appears to be cooling, while US consumers appear to be slowing down as well. Why is the Fed waiting? (WSJ)

Rapid-fire:

• Kuwait announced a huge oil and gas discovery in an offshore field (Bloomberg)

• A high-profile tech investor said Nvidia could reach a $50 trillion market cap in a decade (FT)

• Wall Street is pushing back against climate activists who are protesting under the campaign “Summer of Heat” (Yahoo Finance)

• Fundstrat’s Tom Lee, one of Wall Street’s most bullish strategists, expects the stock market to triple by 2030 (Business Insider)

• Iraq is in talks with the US Treasury over banking and currency restrictions (Bloomberg)

Last thing:

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