Markets Roar on Trump Victory

Confirmed! Trump is good for business and markets don’t lie. Markets around the world are continuing to react to Trump’s win.

U.S./Trump allies, Wall Street, and government bondholders gain.

Wall Street posted the biggest gain in eight years after Trump’s win became apparent. UK’s FTSE 100 index also soared in early trading although it closed marginally down. 

Japan’s Nikkei 225 stock index closed 2.6% up. The pan-European Stoxx 600 traded 0.4% higher by mid-morning after Trump’s victory. The S&P 500 rose 1.7%, while the Russell 2000 gained 4.4%.

Trump’s ally, Tesla’s founder and CEO Elon Musk also gained from Trump’s win after Tesla’s shares gained 14% on Wednesday. The billionaire could rack up to $113 billion in valuation from Trump’s win. Trump has also promised to appoint Musk to audit governmental waste (one of the biggest contributors to inflation) which is good for everyone.

US bond yields also soared as Trump has promised to pay government bondholders and reduce foreign debt. Bond investors expect more internal borrowing under Trump, with interest paid to citizens instead of foreign governments.

Subsequently, the 10-year U.S. Treasury note reached a four-month high of 4.479%, while the 2-year yield reached a three-month high of 4.273%.

Bad day for China and other economic opportunists.

China markets closed down on Thursday, with the Shanghai Composite Index closing 0.1% down while Hong Kong’s Hang Seng index dived by 2.23%.

China stands to lose the most from Trump’s presidency as the former president has promised to confront the country’s deceptive trade practices. Trump has also promised to impose tariffs on Chinese goods, especially electric cars.

The eurozone and the United Kingdom could also suffer from Trump’s tariffs, as he attempts to correct the trade balance that has worked against the U.S. economy.

The UK plans to make a strong case to prevent Trump from imposing tariffs that could hurt the country’s economy. The UK’s economic growth could fall from a projected 1.2% to 0.4% if Trump imposes tariffs on the country’s exports.

Nonetheless, Trump has never shied away from calling out allies, including European allies and NATO, for taking advantage of the United States.

The U.S. Dollar, Bitcoin, and gold gained after Trump’s victory.

Bitcoin reached an all-time high after Trump declared victory and promised to support crypto, contrary to Biden’s crackdown on digital assets. Shortly after Trump’s win, Bitcoin jumped from $6,600 to an all-time high of  $75,999.

Trump has promised to make Bitcoin the “superpower of the world.” Association with Elon Musk, a crypto fanatic, also pumps confidence in the crypto world. Musk invested $1.5 billion in Bitcoin in 2021. 

Trump also promised to fire the chair of the Securities and Exchange Commission (SEC) Gary Gensler for cracking down on various crypto firms.

Gold gained by 0.8% while oil tanked as Trump promised to “drill baby drill” and rival traditional oil exporters such as Saudi Arabia and Russia.

The dollar also gained an average of 1.65% against major currencies, including the pound, euro, and the Japanese yen. Both Euro and pound tanked against the dollar, losing 1.16% and 1.89%, respectively.

Yet, the mainstream media continued to trade on fear by warning that Trump’s tax cut and anticipated tariffs would push inflation. They claim that Trump’s tax cuts would lead to increased consumer spending, resulting in increased inflation.