- An « unknown » has been removed : The President is known .
- + Big hopes in term of growth outlook.
- + Trump President to be more pragmatic vs populist Trump candidate.
- …Global Equity rally against all odds from before election : Looks overdone but technicals are to be watched for break up/down confirmations.
- Financial & Healtcare rallying the most (Regulations & Yield curve steepening )
- Industrials 3rd best sector (Big Infrastructure spending expected).
- Promised tax cuts to favour US companies in general.
- Metals up.
- USD (more stimulus = inflation risk = more fed hikes) & Commodities currencies up.
- Fear of more inflation linked to fiscal stimulus/tax cuts.
- + Rising trade barriers is also inflationnary (supply side shock).
- + Fear of more Bonds issue linked to increased deficit.
- + Fear of a less independant FED / Yellen to resign ?
- … Bond markets sell-off : 10Y treasury > 2% / more pain to come ?
- .. depends on stimulus size ..House republicans are fiscally conservative!!
- Risk : If too large deficits expected from policies put in place , bond yields could skyrocket and kill the growth induced by new policy .
- Uncertainty to persist : Time lag before new administration discloses its real plans.
Stocks Climb With Metals as Trump Win Revitalizes Growth Outlook
Bond-Market Inflation Outlook Picks Up After Trump Victory