Trump's Potential Economic Policies Keep Shaking Up U.S. and Global Markets
Following Donald Trump's election as president, global markets are being shaken by the effects of new economic policies. While the risk of a trade war proposed by Trump is said to increase the probability of a recession, tax cuts are expected to significantly boost the profits of S&P 500 companies. Additionally, it is rumored that Trump may nominate Marco Rubio for the position of Secretary of State and that new spending policies could lead to protests in the bond markets.
“Trump's trade war proposal has raised the US recession risk to 75%” BCA Research's Chief Global Strategist Peter Berezin stated that the risk of recession has increased from 65% to 75% following Donald Trump’s victory in the US presidential elections. Berezin emphasized that Trump's threats of a trade war would exert serious pressure on the economy. He pointed out that the labor market is already weakening and expressed concerns that these policies would further increase the risk of recession.
Goldman Sachs: Trump’s tax cuts could increase S&P 500 profits by 20% Goldman Sachs (GS) predicts that the tax cuts proposed by Donald Trump could boost the profits of S&P 500 companies by over 20% in the next two years. The bank expects the S&P 500's earnings per share to reach $241 by 2024, stating that tax cuts could exceed these targets.
JPMorgan forecasts a stronger year-end rally in 2024 than in 2016 JPMorgan Chase (JPM) anticipates that the year-end rally in US markets will be stronger than the one experienced after Trump’s election in 2016. The bank notes that the US markets are in a more advantageous position, especially in a weak global growth environment.
Trump may nominate Rubio for Secretary of State It is claimed that Trump will nominate Marco Rubio, known for his tough stance against China, for the position of Secretary of State. Rubio could play a key role in Trump’s foreign policy.
Nouriel Roubini: Trump's policies could bring back bond protesters Economist Nouriel Roubini warned that there could be significant pressures in the bond markets if Trump is re-elected and implements major spending policies. Roubini emphasized that the market would discipline such policies, and a shift to more moderate policies would be inevitable with rising bond yields.
Significant outflows from the largest gold ETF following Trump's victory With Trump winning the presidential election, profit-taking activities accelerated in the gold markets. The world's largest gold-backed ETF, SPDR Gold Shares (GLD), recorded its largest weekly outflow in over two years.
Japan to finance chip investments without tax increases The Japanese government announced that it will finance a $65 billion fund allocated to support domestic semiconductor projects without raising taxes. These investments aim to revitalize Japan’s technology sector.
JP Morgan increases weight in Greek stocks JP Morgan has upgraded its recommendation on Greek equities from "neutral" to "overweight." This decision is based on improvements in the country's economic outlook.
UK prepares for blockchain-based bond issuance UK Finance Minister Rachel Reeves is expected to announce a plan for the issuance of blockchain-based digital bonds within the next two years. This step is seen as part of the UK’s strategy to foster greater innovation in financial technologies.