US Assets to Trump the Rest of World
Investors React Positively to Trump’s Election Victory
Asset allocators’ initial reaction to Trump’s victory has been to paint a more positive picture for risk assets in 2025. Investors think there’s a 64% probability that Global Stocks will beat Bonds next year, with preferences for US Equities and for USD.
But Fears of Higher US Core Inflation have Upset Prospects for Bonds
However, this optimism is tempered by fears of higher US core inflation, to the detriment of US Bonds, prompting a preference for Inflation-Linked over Conventionals. But investors still expect an easing in Global Monetary Conditions.
Little Alternative to US equities, but Neutral on Tech vs Financials
Within Equities, there is little interest outside US stocks, but our panel has doubts whether Tech will drive equities higher, preferring Cyclicals over Defensives. The panel is split three ways: inflationary & non-inflationary growth and recession bears.
Key Chart: ASR’s “Composite Optimism Indicator” Signals Improvement
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