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The Trump Effect

Following the recent U.S. presidential election, the markets responded with enthusiasm to Donald Trump’s unexpected return to politics. U.S. stocks jumped over 5%—the biggest post-election boost since 1928. It seems investors were relieved to have certainty on Election Day, fueling the rally. The VIX, or Wall Street’s “fear index,” dropped 40%, reflecting a decrease in market anxiety.

Markets appear optimistic about what Trump’s presidency might bring, especially for Trump-orbiting companies (like Trump Media and Elon Musk’s Tesla) and favored sectors like finance and energy. With Republican control in Congress, Trump likely has fewer political hurdles, but whether his policies will deliver results remains uncertain. Trump’s history of shifting loyalties and policy changes could mean that the current market sentiment may not last, especially as new tensions could arise—think Trump and Elon Musk’s current alliance.

What To Expect Moving Forward

While Trump’s policies remain unpredictable, some key points stand out for his proposed economic agenda. Some Economists warn that proposed tariffs may curb GDP growth, spark inflation, and ultimately cost consumers. However, some investors are betting that higher tariffs could benefit industries like steel and aluminum and boost U.S. manufacturing. Trump also plans broad tax cuts—from income to corporate taxes—that could potentially widen the deficit but may favor big businesses and high earners. Yet, aggressive immigration policies could tighten the labor market, adding pressure on inflation, while restrictions on reproductive healthcare could also reduce workforce participation, especially among women.

The North Braces For Tariffs

Trump has been vocal about his belief that North American trade agreements disadvantage the U.S. by enabling companies to manufacture goods more cheaply in Canada or Mexico. In 2018, he imposed a 25% tariff on Canadian steel, which led Ottawa to respond with its own tariffs on American goods like ketchup and candles. Now, Trump is considering broader tariffs of 10–20% on all imports to the U.S., a move that could cost Canada’s economy $30 billion annually and slow GDP growth.

Global Impact

Mexico and China, frequent targets of Trump’s trade rhetoric, could face steep tariffs of 60–100%, prompting companies to consider shifting production to other countries like Cambodia and Vietnam. Emerging markets felt the pressure last week, with indexes tracking developing economies down 2.5%.

Crypto Surge

The crypto sector is known to have invested heavily in Trump’s campaign, spending around US$133 million on his and other pro-crypto candidates' elections. Trump has promised to replace U.S. SEC Chair Gary Gensler, known for cracking down on questionable crypto practices. With Trump’s victory, Bitcoin hit a new high, surpassing US$86,000.

What’s Happening at Carry?

Here’s what you can expect in the coming weeks

See the full list of events here. ⏰

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If you want more resourceson building wealth as a solopreneur/entrepreneur, check these out:

• The Solo 401k handbook

• The Roth IRA handbook

• The Self-Directed IRA handbook

• The Guide to Paying Less in Taxes

• What is a Solo 401k?

• How to Open a Solo 401k