Trump Trade 2024

November 10, 2024

Election Night on November 5th was just five days ago, and global markets have been reacting to the decisive results that named Donald Trump as the 47th President of the United States.

What struck me while watching Bloomberg was that, by around 8:30 CT, hosts Jonathan Ferro and Annmarie Hordern were already discussing election-fueled price movements as Trump’s lead solidified. In real-time, I saw the United States Dollar post its biggest rally since 2020, triggering Treasury yields to rise amid a major bond-market selloff. Traders were recalibrating expectations in response to a clear signal of a policy shift from the previous administration.

Market Reactions

• $USD: The Dollar surged quickly as investors anticipated pro-growth policies and inflationary effects from tariffs, which could drive asset prices higher.

• US Equities: Both S&P 500 and Russell 2000 futures saw gains. Analysts noted that tariffs may impact large-cap stocks more heavily, potentially benefiting small-caps as they’re less affected by foreign trade policies.

• Crypto: Bitcoin climbed during election night on anticipation of a friendly regulatory environment for the digital asset industry. $BTC futures just passed $81,250 as I’m typing this five days later setting new all-time highs.

• US Treasuries: Bond yields specifically on the 10-Year Notes and 30-Year Bonds increased, which inherently lowers prices on Treasuries. Analysts noted that higher debt payments combined with an inflationary environment would risk a negative spill-over effect in equity markets currently experiencing record-high valuations.

• Foreign Currencies: The Euro, Mexican Peso, and Chinese Yuan declined against the US Dollar, reflecting concerns over targeted tariffs, potential sanctions, and inflationary pressures.

• Commodities: Anticipated tariffs targeting specific foreign industries are likely to have a broad impact on prices across sectors. Inflationary risks could accelerate if foreign economies impose retaliatory tariffs on U.S. industries, a potential scenario some analysts are watching closely.

These initial market shifts highlight how major policy changes can have widespread effects on the global economy. As we move forward, staying attuned to these trends will be crucial for investors looking to navigate a rapidly changing landscape.