What are the results of the first debate?

The first televised debate between the Democratic presidential candidate for the US presidential election, Vice President Harris, and the Republican presidential candidate, former President Donald Trump, was held on 10 September, and judging by the movement in the financial markets after the debate, the probability of Trump's re-election as president has declined.

Earlier on Wednesday,the U.S. stock index futures were mildly lower, the dollar fell against major currencies - notably the yen - bitcoin was down 2 percent, and Trump's company, Trump Media Technology (DJT), was down 15 percent pre-market.

Looking at the movement of these assets, traders believe that the winner of this debate is Harris.

Stephen Innes, Managing Partner of SPI Asset Management, commented, ‘The current weakness of the dollar against Asian currencies and signs of weakness in U.S. stock index futures are consistent with polls showing that Harris has the upper hand in the and Trump has the upper hand in debates with Trump is consistent.’

This view was echoed by Chris Weston, head of research at Pepperstone, who said, ‘As the dust settles from the debate, it's clear that the market sees the debate as favorable to Harris’ candidacy.

He also noted that pop star Taylor Swift's (Taylor Swift) support for Harris has also played a role in pushing the envelope. Harris leads Trump, who has a 47 percent approval rating, with 51.8 percent, according to forecasting website Election Betting Odds.

The economy was the focus of the first debate between Harris and Trump.

Trump claimed that the United States had become a ‘declining nation’ because of Harris' policies as vice president, while Harris said Trump had no plan for the future of the United States.

Trump, a ‘known quantity’ to voters and has had a solid base of supporters for years, and Harris, who is just becoming known to voters, addressed the following issues in the debate.

Tariffs and taxes were the main topic at the start of the tariff debate, with Harris saying that Trump's high tariffs on other countries amounted to a sales tax on Americans.

Harris talked about her proposal to raise the child tax credit to $6,000 for some families and a $50,000 credit for small startups.

As the debate unfolded, Harris spoke again about those proposals of hers, along with proposals aimed at lowering housing costs.

Trump denied that his tariff proposal amounted to a sales tax, saying that it was countries like China that paid the tariffs. Economists generally agree that this view is wrong.

Tariffs are essentially taxes on goods imported from certain countries. By raising the cost of imports, tariffs can increase the competitiveness of domestic U.S. producers, who can charge higher prices to U.S. consumers. Foreign producers sometimes offset some of the costs by lowering their prices, but most of the tariffs are passed on to Americans and U.S. companies that buy foreign goods.

Trump said last week that he would impose 100 percent tariffs on countries that don't use the US dollar. Trump has also said he would impose tariffs of 60 percent or higher on all Chinese imports and 10 percent on all goods imported into the United States.

The Harris and Biden administrations also support tariffs on countries like China, but at much lower rates and targeting a much smaller range of goods.

Tax revenues

Tax reform is likely to be a defining legislative battle in the U.S. in 2025, an issue that has come up repeatedly in the debate.

After Harris laid out her tax credit proposal for children and small businesses, Trump talked about his tax plan.

Trump said, ‘Everybody knows what I'm going to do ...... to cut taxes dramatically and create a good economy like I've done before.’ In 2017, Trump signed a tax bill aimed at lowering corporate and individual income taxes, and the individual income tax cuts are set to expire at the end of next year, meaning tax reform will be one of the top issues on the White House agenda next January.

Trump wants to extend the implementation of all the tax cuts and, in some cases, cut taxes further.

Earlier in September, Trump promised to cut the tax rate on companies that make products in the U.S. to 15 percent from 21 percent, a plan he has not clearly articulated, and some analysts are confused as to how it will be implemented.

Harris wants to extend tax cuts for Americans earning less than $400,000 a year but would raise other rates, and she has proposed raising the capital gains tax to 28 percent from 20 percent, but lower than Biden's proposal of 39.6 percent.

Like Biden, Harris wants to tax unrealized capital gains in some cases. Some economists believe the move would be difficult to implement and could hurt industries such as real estate and venture capital.

Immigrants

Trump almost always brings the debate back to immigration and the border crisis when answering any question, and polls show that along with the economy, immigration is one of the top topics of concern for voters.

Trump said, ‘What they're doing is destroying the fabric of our country.’ Trump insisted that there are more illegal immigrants than official statistics show.

Trump has vowed to launch ‘the largest deportation in American history,’ and in addition to continuing to build a border wall, he has proposed using the military to stop illegal immigrants from crossing the border, as well as revoking birthright citizenship for children born to illegal immigrants. Trump has linked illegal immigration to other sore points with voters, such as inflation and high housing prices, but some economists argue that immigration is one of the reasons the United States has been able to grow faster than other developed countries with lower inflation.

Harris supported a bipartisan immigration bill negotiated by the Biden administration and Republicans earlier this year that would have prevented illegal border crossers from seeking asylum and funded new border security measures. Trump opposes the bill. Harris' critics say her support for the bill runs counter to views she expressed during her 2019 presidential primary run when she decried the construction of a border wall as a waste of money.

Renewable energy

Energy policy is another angle Trump is attacking Harris on, with Trump saying Harris intends to ban fracking. Fracking is a hot-button issue in swing states like Pennsylvania, where the method of extracting natural gas and oil has become a burgeoning economic sector.

In 2019, Harris expressed support for a fracking ban, but now she says she doesn't support it.

The topic was clearly very sensitive in this debate, and as the moderator moved on to the next topic, Harris still tried to refute Trump's claim that she supports the ban. Trump again reiterated in his closing remarks that he believes Harris would ban fracking, and emphasized that his campaign sees it as a potential weakness for Harris in Pennsylvania.

With neither candidate revealing important policies they haven't yet talked about on the campaign trail, Tuesday's debate won't have as big an impact as the one in June that led to Biden's withdrawal, and investors will have to keep watching to see if Trump's or Harris's performances change the tide of the campaign.

Main topics of the debate

The two candidates argued deeply on core issues such as economic policy, foreign affairs, immigration, gun policy and abortion rights, displaying very different positions and visions.

Economic policy

On economic policy, the differences between Harris and Trump are clear. Harris has proposed her vision of an ‘opportunity economy’, which aims to support low- and middle-income families and small businesses by increasing the child tax credit (from $3,000 to $6,000) and providing tax credits for small business start-ups. She also plans to reduce the gap between rich and poor by boosting economic growth through massive investments in clean energy and infrastructure, creating green energy jobs, and improving transport and water systems.

In contrast, Trump has sharply criticized Harris's policies, calling them a ‘blank cheque’ that would increase government debt and tax burdens, ultimately hurting the middle class and small businesses. He has argued for the continuation of his own tax cuts, which he says have helped boost businesses and create jobs. Trump also emphasised the ‘America First’ trade policies he has implemented during his time in office, particularly the tariffs on China, arguing that they have been effective in protecting the US manufacturing sector and reducing economic dependence on external countries.

During the discussion, Trump also accused Harris of being too aggressive with her green energy plans, which could destroy the traditional energy sector and lead to massive job losses. He believes her policies will harm the long-term competitiveness of the U.S. economy.

National solidarity

Speaking of national unity, Harris stressed her desire to be ‘a president for all Americans’ and to repair social divisions through inclusiveness and cross-party cooperation. She referred to the current political polarisation in the United States, which has increased racial, gender and class tensions, and that the administration's top priority is to heal these rifts. Harris also warned against the Trump-backed ‘2025 Initiative,’ led by the Heritage Foundation, which seeks to overhaul the federal government, cut social services, and further exacerbate inequality and social divisions. She emphasised that the experience of her running mate, Minnesota Governor Tim Walz, in working across party lines would help her achieve the broader goal of unity.

Trump quickly responded by denying any connection to the 2025 plan, claiming he had ‘deliberately’ not read it. He emphasized that national unity should be based on strong border security and a fair electoral system, accusing Harris and Biden of policies that have exacerbated social divisions, immigration problems and rising crime rates. He argued that Harris's rhetoric on national unity was ‘hyperbole’ and accused the social justice movement she supports of fomenting violence and riots and destroying the peace in major cities.

Trump contrasts with Harris's vision of unity: Harris favors inclusiveness and cooperation, while Trump focuses more on order and border security.

Tariff policy

Tariff policy became a key topic of debate between the two candidates. Harris sharply criticized Trump's trade war, especially the high tariffs on China and the European Union. She pointed out that Trump's tariff policies have failed to effectively protect American workers, and have instead led to a rise in the cost of living for American families, especially as the prices of imported goods, such as home appliances, electronics, and agricultural products, have skyrocketed. She also mentioned that the U.S. trade deficit reached an all-time high during Trump's presidency, proving that tariff policies have not improved the trade balance. Harris advocated for a more strategic trade policy by working with international allies to strengthen intellectual property protection and promote green technology, rather than isolating the United States.

Trump has staunchly defended his tariff policy, calling it ‘necessary to protect American workers and businesses.’ He emphasised that the tariff measures against China have enabled the US to restore fair trade and increase US revenues. He mocked Harris' current policies as similar to his, even playfully suggesting that she be given a “MAGA” hat. He called Harris's economic policies a ‘total disaster’ and said her solutions were ‘devoid of substance’. He also emphasized that his policies had led to the recovery of the US semiconductor industry, refuting Harris' allegations about chip technology.

The right to abortion

Abortion rights have also become a focal point of the debate.

Trump defended the 2022 Supreme Court decision overturning Roe v. Wade as ‘the best way to leave the issue of abortion up to the states.’ He accused Democrats of taking an ‘extreme’ position on abortion and supporting ‘ninth trimester abortions.’

Harris responded by calling Trump's comments ‘insulting to American women’ and stressed that no state in the US allows abortion after the ninth month of pregnancy. She warned voters that Trump, if re-elected, could push for a national abortion ban, and that she supports reinstating the abortion protections of Roe v. Wade.

Foreign policy

On foreign policy, Harris and Trump have divergent positions on Israel and Ukraine.

Harris supports Israel's right to self-defence and emphasises the roadmap to a two-state solution.

Trump said the Israeli-Palestinian conflict ‘would never have started’ if he had remained president. He added that the conflict between Russia and Ukraine will also end when he is re-elected. Trump also said it was in the best interest of the United States to end the Russia-Ukraine war and bring closure to it. He criticised Biden's handling of the Ukraine issue and dismissed Harris as ‘clueless’ about international affairs, deriding her diplomatic strategy as ‘empty rhetoric’.

Immigration and guns

Trump tried to blame Biden and Harris for America's ‘border problems’. He referred to rumours that immigrants were eating pets in American towns and cities. Trump promised to carry out the largest deportation operation in the history of the United States when he takes office. Harris, for her part, expressed confusion over Trump's comments, criticising him for spreading misinformation and inciting fear. She also said she would push for comprehensive immigration policy reform.

On gun policy, Harris clarified that both she and running mate Tim Walz are gun owners, denying Trump's allegation that she would ‘take away Americans’ guns.

Closing statement

In her closing statement at the debate, Harris painted two very different visions for the country. She stated that the American people should choose a president who focuses on the future, not one who leads the country back to the past. She promised to be a president who serves all Americans by investing in small businesses and families, lowering the cost of living, and protecting the nation's fundamental rights.

Trump, for his part, pushed back against Harris, questioning why she had failed to achieve what she said she would do during the past three-and-a-half years as vice president. He called Harris ‘the worst vice president in the history of the country’ and argued that she and Biden have failed to effectively create jobs and secure the border. He also said that the policies of Harris and Biden had led to ‘economic collapse’ and ‘social chaos’ in the United States.

The televised debate saw Harris try to win over voters by demonstrating policy continuity and a message of unity, while Trump continued to emphasise his tough policies and anti-establishment stance. With eight weeks to go before the presidential election, the electoral battle between the two sides is expected to continue to intensify.

Misery Index Predicts Harris Win In the 2024 U.S. presidential election, the performance of the economy has become one of the most important factors in determining the winner, known as the ‘misery index’ (misery index) index for its accurate prediction of the outcome of the election has attracted attention.

The Misery Index is the result of adding two percentage figures, the U3 unemployment rate and the annualized inflation rate (CPI). According to an analysis by research firm Strategas, this indicator has accurately predicted 15 of the last 16 US presidential elections and has not ‘missed’ since 1980.

Specifically, when the U.S. election one month before the polling day of the misery index in 7.353 or less, then the U.S. president belongs to the political party will not be changed in this election; and if in 7.353 or more, the White House will change hands, that is, from the Republican president into the Democrats, or the Democratic president into the Republican Party.

The composition of the Misery Index is reminiscent of the Federal Reserve's ‘dual mandate’ - price stability and dual employment. Simply put, a low misery index means that the economy is not ‘miserable’ enough to hit the party in power.

Barry Ritholtz, co-founder of Ritholtz Wealth Management LLC, has explained that outside of wartime, people tend to vote according to their wallets. He acknowledges that there are many ways to measure economic sentiment, but quantitative indicators are superior to flawed surveys and polls.

Thus, when the misery index is high, it's obviously a bad sign for the party in power. As of July, the U.S. misery index stood at 7.02, and if this indicator continues into October, it would mean that Democratic presidential candidate Kamala Harris defeats Republican presidential candidate Donald Trump.

The situation seems to be favoring Harris, given that the unemployment rate for August, which was released on Friday, fell slightly by 0.1 percentage points to 4.2%. Daniel Clifton, head of policy research at Strategas, said that in addition to the unemployment rate, the fall in petrol prices had also helped to contain the economic woes, thus providing help to the Democrats.

Misery index will soon be updated, because on Wednesday before the U.S. stock market will be released in the August CPI report, the market is expected to CPI annual rate will fall to 2.6% from the previous month's 2.9%, which is expected to further ‘good’ Harris. But Clifton stressed that the campaign is still ‘difficult to win’.

Recently, the U.S. The labour market showed signs of cooling. Although the unemployment rate fell slightly in August, the number of jobs grew less than economists predicted. If the unemployment rate subsequently rises significantly, it could push the misery index into the area of ‘predicting the election of Trump’.

It should be noted that the Misery Index was below 7 for most of Trump's first term, but the election-year outbreak of the new crown epidemic led to a spike in both unemployment and inflation. Therefore, trying to predict the outcome of the election through the Misery Index will have to wait for future reports.