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Dollar up: "After his McDonald's shift, the markets appear to be 'going large' on a Trump win"

ended 23. October 2024

The Dollar is up as markets increasingly bet on a second term for Trump. As one expert put it: “After his McDonald's shift, the markets appear to be 'going large' on a Trump win". He added: “We would see a stronger Dollar under a Trump Presidency.” Meanwhile, one trader has said that, if Trump wins, “tech stocks could get an absolute rocket. Considering how chummy Trump has been with Elon Musk and the slight shift to the right of Silicon Valley, tech could fly if Trump gets a second term”. The views of experts on what asset classes could benefit, and how the greenback would be affected by a Trump victory, are below.

4 responses from the Newspage community

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Anita Wright
Independent Financial Adviser at Ribble Wealth Management
If Trump wins, initially stock markets are likely to perform well, with the S&P 500 potentially reaching 6,000. However, concerns about the growing U.S. deficit will soon emerge, especially as Trump is expected to increase spending. This may cause the treasury market to become jittery due to the resurgence of inflation. As inflation returns, investors may begin to doubt the Fed's ability to manage the situation, leading to a reaction in the bond market and a spike in U.S. Treasury yields. Additionally, the possibility of Trump imposing new tariffs, such as a proposed 10% tariff on foreign imports, could further drive inflation and slow economic growth. When inflation spikes, interest rates will likely rise in response, and eventually, the stock market may capitulate under the weight of these broader economic pressures.
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Prem Raja
Head of Trading Floor at Currencies 4 You
Over the past few weeks, the "Trump Trade" has been very much in the spotlight, with the US Dollar catching a bid across the board, pushing GBP/USD below 1.30 and EUR/USD below the 1.08 level. My view is that a Trump win would see a continuation of this and we would see a stronger Dollar under a Trump Presidency. Alongside that, expect tech stocks in particular to keep flourishing if we see a Trump win. The US stock market in general and the Nasdaq in particular will see a lot of growth if Trump gets a second term and the market seems to be showing its hand already on this. It will be interesting to see how things play out over the next couple of weeks but it does seem a Trump win is being increasingly priced in. After his McDonald's shift, the markets appear to be 'going large' on a Trump win.
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David Belle
Founder and Trader at Fink Money
If Trump wins, tech stocks could get an absolute rocket. Considering how chummy Trump has been with Elon Musk and the slight shift to the right of Silicon Valley, tech could fly if Trump gets a second term. In my view, the Nasdaq should get a bid. Remember that a 1% increase in GDP growth leads to a 3% increase in the Nasdaq. Zuckerberg might not admit it, but he’s blatantly voting Republican this time round, probably due to Kamala’s threat of taxing unrealised gains. Another good bet is any companies that were adversely affected by Biden’s roll-back of legislation. A stock I have bet on is Great Lakes Dredge and Dock because Trump permitted more dredging, Biden withdrew the law. Naturally then a strong bet is to be long this into a Trump win.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As the spectre of a second Trump presidency looms, the geopolitical landscape faces potential upheaval, unleashing fresh volatility across global markets. A Trump victory will likely invigorate certain sectors of the US equities market, particularly those aligned with his pro-business and deregulatory agenda, along with small-cap stocks, which are more domestically focused and sensitive to tax policies. Trump has a stated goal of weakening the dollar to boost exports, however, his policies might paradoxically strengthen the greenback in the short term. In the medium term, though, expansive fiscal policies and rising deficits would weigh on the dollar's strength. Trump's trade policies could also pose significant challenges, with a renewed focus on protectionism leading to further trade barriers, particularly with the UK and EU. Moreover, Trump's potential tariffs on Chinese goods might drive China to seek closer economic ties with Europe as it looks to offset losses in the US market.