21.01.25 - Trump 2.0 - no euphoria 2.0

A very busy Donald Trump on his first day of being president, signing a high number of executive actions in different subjects.

Markets: China’s stock market up last night as tariffs not (yet) on agenda. Cryptos down as no acts on this topic (yet). Interest rates down as tariffs seem delayed and maybe less high as feared. US dollar with some reversal today after the strong drop yesterday.

My View: Markets showed a big wave of euphoria after Donald Trump was elected as the 47th president of the United States of America back in November. A lot of optimism got priced in. Today, there seems so far no second wave of euphoria to establish after the inauguration of Donald Trump.

A high level of uncertainty keeps investors on a cautious wait-and-see approach before making the next bets. As I already mentioned several times before, from now on, there can be any day during the coming 1’460 days ahead, when financial markets suddenly see a big reaction on news coming from the White House. This potential of rollercoaster has to be kept in mind as short-term market fluctuations driven by political news can be dramatic. However, it is important to keep the focus on long-term fundamentals, such as corporate earnings, economic growth, and industry trends as sharp market moves driven by political developments are often only temporary. Strong (over-)reactions always bear chances to benefit.

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