The American people have voted and made their decision.

Donald Trump has been elected as the 47th president of the United States.

Returning for his second term, he thanked a large crowd of his supporters on Wednesday (6 Nov) and said:

“This was a movement like nobody’s ever seen before, and frankly, this was, I believe, the greatest political movement of all time. There’s never been anything like this in this country, and maybe beyond.”

The 2-3 months leading up to the US election was a roller coaster ride of events, with the disastrous presidential debate forcing Biden to drop out of the race, Trump nearly being assassinated, and Kamala Harris replacing Biden as the first black woman to run as the Democratic nominee.

That said, the 2024 presidential race was not a particularly tight one. Unlike the 2020 election, Trump won with an overwhelming advantage.

The final result was 295 electoral votes in his favor versus Kamala’s 226:

Experts said that Kamala did not do enough to win the hearts of young voters, while others hinged Trump’s victory on Elon Musk’s vocal and financial support.

Being the world’s richest man and the most followed figure on X, Musk has helped Trump leap through the race with contributions (totaling approx. $132 million), X spaces, and Tweets.

How did the markets react?

It’s pretty clear which president the market prefers. US stocks surged to a new all-time high following Trump’s victory, adding over $1.28 trillion on Thursday.

The rally continued through the end of the week, and the S&P closed just 10 points shy from 6,000 points on Friday.

The index gained 4.88% in three days and is up 26.47% since January.

The Magnificent Seven stocks (ie. Apple, Nvidia, Microsoft, etc.) were up 3-6% within a similar period, but Tesla surged 28%, in large part due to Musk’s unwavering support towards Trump.

Having publicly endorsed Bitcoin in the past, Trump’s positive stance on cryptocurrencies has brought the crypto market into firm green territory.

Bitcoin hit a new all-time high of $79,600, up 14.55% in the past week. Ethereum’s price has also begun to rise on that tailwind, popping 20% within a similar period and reclaiming the $3,000 mark.

The US dollar has also strengthened, gaining 1.48% against the ringgit to its August high of RM4.4203, before retracing to RM4.38 on Friday.

How will markets move going forward?

1) Dollar to stay strong.

According to Hong Leong Bank Research (HLIB), the president elect’s policies will lead to higher inflation and growth for the US, which will force the Federal Reserve to cut interest rates more slowly.

"In our view, rising expectations of a softer Fed rate down-cycle – and consequently, slower narrowing of the Fed Funds Rate-Overnight Policy Rate spread – would be negative for the ringgit," it said.

In other words, slower rate cuts will keep the difference in interest rates between Malaysia and the US higher for longer, leading to more downside for the local note.

2) Stock markets (especially the US) will rally.

Trump favors less regulation, more tax cuts for bigger corporations, more oil production, and tougher immigration policy.

This is viewed as positive for equities, which will mainly benefit sectors such as banks, technology, defense and fossil fuels.

Strategists at Goldman Sachs estimate the earnings per share for the S&P500 would rise by about 4% if Trump reduced the statutory domestic corporate tax from 21% to 15%.

Meanwhile, Deutsche Bank analysts said they would upgrade their 2025 U.S. growth forecast to 2.5-2.75% from 2.2%. However, they expect to reduce their 2026 growth forecast in anticipation of economic uncertainty associated with an intensifying trade war.

3) Green energy stocks to suffer.

Trump has repeatedly called climate change a “hoax” in the past. Upon his victory, he promised to delete the climate policy and said that the US has more “liquid gold” than any country in the world.

He lent heavily on his mantra of “drill, baby, drill”, as well as announcing he wanted to “terminate” spending on what he calls the “green new deal”.

His administration will look to increase production of oil and gas while reversing some (if not most) of the climate change policies enacted by Biden.

4) Bitcoin could see multiple all-time highs.

The 47th president of the US advocates cryptocurrencies and self custody. Just a few months ago, he pledged that he wants to make America “the crypto capital of the world” during a speech at the Bitcoin 2024 conference in Nashville.

Bullish traders expect Bitcoin’s rally to continue, targeting $100,000 by the new year. Still, the performance will largely depend on whether Trump shows that he will follow through on the promises he made to the crypto industry.

5) Gold “may” retrace.

Upon his victory, Trump has promised to “stop the war” before his inauguration on 6 Jan 2025. If he succeeds, then gold could see a retracement, as the precious metal tends to soar during geopolitical conflict.

That said, gold will still continue to go up over the long term due to the Federal Reserve’s rate cuts.

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That’s all for this week’s newsletter!

Disclaimer: The information contained in this newsletter is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.