The 2024 election is shaping up to be a historically significant one with more than 78 million Americans casting their votes for the next US President.

In the leveraged finance market, activity in the primary market has cooled as all eyes turn to the outcome of the election. Market participants speaking with 9fin have indicated that a win by current Vice President Kamala Harris would be an extension of the current Biden policies, while a win by Republican nominee Donald Trump could cause significant changes to the economy and public policy which could trickle down into the LevFin space.

“A Harris victory with divided government would broadly align with our economists view of trend-like 2025 US and global GDP growth, while a Trump victory would likely bring material changes to the outlook,” wrote JP Morgan analysts in a 5 November research note.

Another CLO manager pointed out that the biggest concern for investors was the impact on interest rates, and said that election could determine whether investors would favor the equity markets over fixed income.

“If Harris were to be elected I do think corporate taxes and taxes generally would go higher which would put pressure on equities but fixed income becomes more desirable,” the CLO manager said. “If Trump’s elected you’d see tariffs going up and margins down, this would be more positive for equities but makes fixed income less positive. So pick your poison.”