Potential Impacts of Trump’s Victory on Banks, Autos, and Luxury Goods
Since President-elect Donald Trump’s win, the markets have taken off, bolstered by the promise of a new regulatory landscape and a solid third-quarter earnings season.
Many investors are now eagerly watching for the impact of Trumponomics 2.0 on different industries and companies. The latest round of earnings reports gives us some hints about what might be in store.
Banks are likely to see some benefits under a Trump administration, with regulations on capital requirements expected to relax. This could mean quicker merger approvals, which is good news for the banking industry. Recent reports show big banks like JPMorgan are doing well, with a 6% rise in debit and credit card spending. Consumer strength looks set to continue, unless labor markets shift.
On the flip side, concerns about increased government spending may drive inflation, raising yields on longer-term Treasuries. The benchmark 10-year Treasury yield rose to 4.34% on 7 November 2024 from 3.78% at the end of September 2024. The Federal Reserve is likely to keep pushing for a normalised rate environment over the next year.
US automakers saw a bump in stock prices post-Trump’s win, as investors pondered the implications of looser regulations and monetary policy. But there are challenges ahead, especially given the potential for tariffs on global auto supply chains. A trade war could disrupt markets further. The auto industry was already facing tough times with muted demand, driven by high rates and prices. Average monthly car payments in the US are currently around $730.
As we navigate this new terrain, let’s keep an eye on how businesses and industries fare in the midst of these changes. Exciting times are ahead!
