NVDA
NVIDIA
-- 140.110 RGTI
Rigetti Computing
-- 10.0400 TSLA
Tesla
-- 394.940 IONQ
IonQ Inc
-- 30.250 AMD
Advanced Micro Devices
-- 121.840 
Trump 2.0 vs. Trump 1.0: Outlook for Major Assets Performance
Trump's first term spanned from January 20, 2017, to January 20, 2021, during which time major asset classes like $Bitcoin (BTC.CC)$, $S&P 500 Index (.SPX.US)$, and $XAU/USD (XAUUSD.CFD)$ saw remarkable gains, increasing by 3,871%, 67.82%, and 55.44% respectively. Conversely, $USD (USDindex.FX)$ and $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ experienced declines of 10.64% and 56.32% respectively.
Since Election Day on November 5, 2024, up to December 26, 2024, the S&P 500 and Bitcoin have continued to show strength, with increases of 5.69% and 41.18%, respectively. In contrast to the first term, the US dollar index and the U.S. 10-Year Treasury Yield have both risen, by 4% and 6.95%, respectively, while gold has declined by 3.37%.
What are the differences in policy direction between Trump 2.0 and Trump 1.0, and how might major asset classes perform after Trump's inauguration on January 20th?
Trump 2.0 vs. Trump 1.0: Policy Comparison
Trump 2.0 policies primarily include domestic tax cuts, tariffs on foreign goods, deregulation, deportation of illegal immigrants, and promoting fossil fuels in industrial policy.
Compared to Trump 1.0, Trump 2.0 has outlined more sweeping tariff policies, promising to levy a 10% tariff on all imported goods, potentially a 60% tariff on China, and once claiming to impose a 25% tariff on all goods entering the US from Mexico and Canada, with an additional 10% tariff on Chinese goods. To promote economic development and create job opportunities, he has proposed reducing the corporate tax rate to 15%. In terms of energy and environmental policy, he plans to end subsidies for green energy and increase oil and gas resource extraction. In foreign policy, he will prioritize America and reduce involvement in geopolitical issues. Trump 2.0's policies may increase fiscal deficits and exacerbate inflationary pressures in the US.
Trump 2.0: Outlook for Major Asset Classes
1. Domestic Tax Cuts and Deregulation: Finance and Small-Cap Stocks Stand to Benefit
During Trump's first term, $S&P 500 Index (.SPX.US)$ showed strong performance, with the technology, energy, and manufacturing sectors experiencing significant gains. It seemed that Trump's policy stance was more favorable to the stock market. So, what impact will Trump 2.0 policies have on the U.S. stock market?
The Trump administration's policy of lowering corporate tax rates and increasing fiscal stimulus could help economic growth and corporate profits, potentially continuing to boost the stock market.
The financial sector, especially bank stocks, may benefit from tax cuts and deregulation. After Trump's election victory, $Goldman Sachs (GS.US)$, $JPMorgan (JPM.US)$, and $Citigroup (C.US)$ all saw significant increases.
Trump's tax cut policies particularly benefit small-cap stocks, as reducing the corporate tax rate to 15% could drive profit growth for these companies. After Trump's election win, $Russell 2000 Index (.RUT.US)$ reached a historical high, with a gain of over 10%. Analyst Reuben Nagvivid expects that capital concentration will decrease, with funds shifting from tech giants to smaller and more cyclically sensitive stocks.
Trump-related stocks will also be affected. After Trump's election, $Tesla (TSLA.US)$ stock price hit a new high, $Trump Media & Technology (DJT.US)$ stock soared, and Bitcoin-related stocks also saw significant gains. With Trump taking office, one can continue to watch for opportunities in stocks related to Trump's trade.
2. Actively Advancing the Development of Digital Currencies: Bitcoin Prices Expected to Reach New Highs
During his first term, Trump held a skeptical and dismissive attitude towards cryptocurrencies. He criticized Bitcoin and other digital assets on multiple occasions, calling these volatile and speculative assets a scam, and advocated for the dollar as the only legal currency in the United States. Despite Trump's lack of support for Bitcoin during his first term, $Bitcoin (BTC.CC)$ still surged by 3817%.
Unlike his first term, Trump 2.0's policy towards Bitcoin is very positive. Not only has he expressed support for the development of cryptocurrencies in public, but he has also proposed plans to include Bitcoin as a strategic reserve asset for the United States. Through legislation, he has established annual procurement targets to gradually expand the country's Bitcoin holdings and further promote the development of the cryptocurrency industry after taking office. After Trump's re-election, the price of BTC has skyrocketed, breaking through the $100,000 mark and setting a new historical high. From November 5 to December 26, the cumulative increase exceeded 41%.
Given that Bitcoin still saw a significant surge during Trump's first term despite his lack of support, one might wonder how Bitcoin will perform during his second term with his explicit support. Recently, the price of BTC has experienced some decline, fluctuating around $95,000. VanEck predicts that by the end of 2025, the cyclical peak price of BTC will reach $180,000, and Alemzadeh believes that BTC will rise above $100,000 in 2025, with a long-term target of $250,000.
Cryptocurrency-related stocks: $MicroStrategy (MSTR.US)$, $Coinbase (COIN.US)$, $MARA Holdings (MARA.US)$, $CleanSpark (CLSK.US)$, and $Riot Platforms (RIOT.US)$.
3. Reduced Geopolitical Conflicts and Monetary Policy: Intensified Gold Price Volatility
During Trump's first term, gold prices were robust, primarily due to ongoing inflation, geopolitical tensions, and economic policy uncertainties that fueled the rise in gold prices.
In this term, Trump has publicly stated that if he returns to power, he will end the Russia-Ukraine war and the Israeli-Palestinian conflict, which could help reduce global geopolitical risks and, to some extent, diminish the safe-haven value of gold, impacting gold prices. Meanwhile, the December Federal Reserve meeting released hawkish statements, with Powell indicating that as policy rates approach the neutral rate, the Fed needs to be more cautious. Reduced expectations for rate cuts will also have a certain impact on gold prices. However, Trump 2.0's policies may lead to rising inflation in the U.S., especially measures like increasing tariffs and reducing taxes, which could trigger inflation and, to some extent, benefit gold prices.
Goldman Sachs forecasts that:
Gold prices will reach an all-time high, expecting them to rise to $2,900 per ounce by early 2025, up from a previous forecast of $2,700.
4. Strengthened Tariff Measures and Hawkish Fed Signals: The US Dollar Shows Strong Performance
Since Election Day, $USD (USDindex.FX)$ has been strong, with Trump's tariff and fiscal policies being key drivers of the dollar's strength. Market reactions to his tariffs are likely to devalue other currencies. After Trump announced a 25% tariff on all goods from Mexico and Canada entering the US, and an additional 10% tariff on Chinese goods, the dollar strengthened, while the Chinese yuan and Mexican peso declined, and the Canadian dollar hit a four-year low.
Trump's fiscal policies could also continue to bolster the dollar's strength, as his proposed tax cuts may increase inflationary pressures in the US. This, combined with the Federal Reserve's anticipated reduction in rate cuts by 2025, could further strengthen the dollar.
Although Trump's stimulus policies have a positive effect on the US Dollar Index, there is a contradiction between his team's stated desire to intervene and weaken the dollar to enhance the competitiveness of American manufacturing and exports, which introduces greater uncertainty into the dollar's trajectory.
5. Expanding Fiscal Deficits and Rising Inflation Expectations: Increased Volatility in US Treasury Yields
Since Election Day andas ofDecember 26, 2024, $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ has seen a cumulative increase of 6.95%, reaching a high not seen in nearly seven months. Market concerns over the inflationary effects of Trump's policies and the exacerbation of fiscal deficits have led to a rise in US Treasury yields. However, with Treasury yields already at elevated levels, a cautious attitude is warranted.
Trump's fiscal policies are expected to increase government debt. According to estimates by the Committee for a Responsible Federal Budget, Trump's fiscal policies will add $7.75 trillion to government debt over the next decade. This heightens investor concerns about future US fiscal deficits and debt levels, affecting bond yields.
Trump's policies, particularly tariffs and fiscal stimulus measures, may raise inflation expectations. Coupled with the impact of Federal Reserve policies, the Fed's December meeting signaled a hawkish stance, with a reduction in the number of rate cuts or even a halt to rate cuts expected by 2025, leading to diminished expectations for future rate decreases.
Source: Moomoo, Bloomberg
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Trump 2.0 countdown: What's the next big opportunity in the markets?
Trump is gearing up for a return to the political stage, and his "America First" tariff policies, along with his stance on cryptocurrency an
Michael McCarthy CCO
Jan 3 11:57
Ask a strategist - Trump's first day
103356238jenny tan :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Supermengg :
Ville Kulmala : It's going to be a disaster
104088143 : Okay
劏猪凳 : Can tariffs and protection fees save the US?
101702469 : all prices will be up. bitcoin, stock,usd, rates, gold.
food, car, housing , usa will be strong. good for usa. the rest of the world KABOOM....
101519962 : Trump’s cooking hope to be delicious?
101519962 101519962 : It could be the same view in terms of new investors… but experience investors may have different opinions…
101519962 劏猪凳 : Not likely… if push a lot both side will have impact too
Jamesjinlin : If you need to count on Trump for a currency, which means Trump has the ability to mint coins, then why doesn't Trump issue his own Trump coins? Anyway, they want to buy this bunch of stupid X Trump crap
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