Read Part 1 here – MLK Day Market Trends: Friday Gains, Midweek Pains – Part 1
Ahoy there Trader! ⚓️
It’s Phil…
As Trump takes the oath for a second time, the markets are stirring with anticipation and a hint of nervous energy. From stocks to bonds to the dollar, his policies could spark ripples—or waves—across financial markets. Let’s dive into what you need to know as the world tunes in to Trump 2.0.
Stock Market: Volatility in Focus
Historically, presidential inaugurations haven’t rocked the stock market, but Trump’s return could be different. Known for his unpredictability, investors are bracing for potential shifts tied to his policy announcements. His inaugural address could provide insight into trade policies, tariffs, and deregulation, all of which are critical to market sentiment.
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US Dollar: Strength or Uncertainty?
The US dollar stands at a crossroads. Pro-business rhetoric and growth-oriented policies could support the greenback. However, any hint of trade wars or tariffs could dampen enthusiasm. Investors will be on high alert for language around trade agreements and foreign relations.
Bonds: Inflation Expectations Loom
Bond markets might not escape unscathed. If Trump signals increased government spending or fiscal expansion, inflation expectations could rise, driving bond yields higher. Investors will also consider how his policies align with the Federal Reserve’s stance.
Global Markets: Trade at the Core
The world will be watching Trump’s stance on global trade. His approach to tariffs and agreements with key partners like China could shake international markets. With the global economy still recovering from past trade disruptions, his rhetoric will be scrutinised for signals of cooperation—or confrontation.
Investors: Stay Prepared
This isn’t just another inauguration. The markets are walking a tightrope, balancing anticipation with caution. As Trump’s administration reveals its priorities, investors must stay informed and adaptable to navigate potential fluctuations. Patience and preparation will be key.
Fun Fact:
Did you know Martin Luther King Jr. was posthumously awarded the Presidential Medal of Freedom in 1977? President Jimmy Carter honoured Dr King’s legacy, cementing his contributions to civil rights and equality.
Happy trading,
Phil
Less Brain More Gain
…and may your trades be smoother than a cashmere codpiece