“特朗普交易”这一概念在特朗普2016年首次赢得总统大选后开始流行，随后美股和美元飙升——这与本月大选后的情况类似。与8年前的情况类似的情况还有，受到监管将放松的预期的提振，银行股是上涨最快的板块之一，而小盘股则因对减税和投资相关政策承诺的乐观情绪而大幅上涨。更广泛地说，这些举动表明，投资者对特朗普政府刺激经济增长和企业利润的政策抱有信心。Assets such as stocks and corporate bonds are already expensive compared to historical levels, and Trump's protectionist trade policies may cause a resurgence in inflation and force the Federal Reserve to keep interest rates high for a longer period of time. Furthermore, the US economy is facing an expanding fiscal deficit and an already fatigued labor market, which may put pressure on economic growth prospects.
The Zhitong Finance App learned that after Trump won the US presidential election last week, assets such as the US dollar, US stocks, and Bitcoin, which are viewed as “Trump transactions,” rose in response. Currently, the “Trump deal” still envelops the market, and Trump's economic agenda, such as tariffs, tax cuts, and deregulation, will drive large fluctuations in the global investment landscape. As Trump tries to break everything from free trade to the independence of the Federal Reserve, this era is likely to become more turbulent.
But investors are concerned about, how far can the “Trump deal” go? Assets such as stocks and corporate bonds are already expensive compared to historical levels, and Trump's protectionist trade policies may cause a resurgence in inflation and force the Federal Reserve to keep interest rates high for a longer period of time. Furthermore, the US economy is facing an expanding fiscal deficit and an already fatigued labor market, which may put pressure on economic growth prospects.
The concept of a “Trump deal” became popular after Trump first won the presidential election in 2016, then US stocks and the dollar soared — similar to the situation after this month's election. There is also a situation similar to the situation eight years ago. Boosted by expectations that regulations will be relaxed, bank stocks are one of the fastest rising sectors, while small-cap stocks have risen sharply due to optimism about promises of tax cuts and investment-related policies. More broadly, these moves show investor confidence in the Trump administration's policies to stimulate economic growth and corporate profits.
However, the fixed income market is reacting differently this time than it was 8 years ago. Ten-year US Treasury yields rose sharply on the first trading day after the election, then declined over the next two trading days, then rose again. This fluctuation reflects market participants' doubts about the next step in the “Trump deal.” To make matters worse, the Federal Reserve is currently in an easing cycle.
And given Trump's vow to implement a game-changing regulatory agenda in favor of digital assets and establish America's Bitcoin strategic reserve, cryptocurrency is a key component of this “Trump deal.” All of this has prompted short-term traders and institutional professionals to invest billions of dollars in digital currencies and push digital currencies like Bitcoin to record highs.
It's hard to say how long the “Trump deal” will last. A few months after the 2016 election, the momentum of the “Trump deal” began to subside. During the 2020 election, a series of “Trump deals” — a stronger dollar, rising US bond yields, and excellent performance in bank stocks and small-cap stocks — were largely affected by the pandemic, and either returned gains or were reversed.
Today's US economy and market are at a more mature stage than they were eight years ago. The price-earnings ratio of the S&P 500 index is 26 times, which is 35% higher than in 2016. This left little room for a new round of valuation-driven rebound, and raised the threshold for policies such as Trump's tax cuts to boost corporate profits. More importantly, tax cuts without corresponding spending cuts may lead to a rebound in inflation, which may force the Federal Reserve to reconsider plans to continue cutting interest rates. The recent tug-over in US Treasury yields reflects these concerns.
