CIO Commentary: Donald Trump is US President again

Donald Trump is US President again - what does this mean for the financial markets? Our CIO Simon Lutz talks about how Tareno is positioning itself and answers the question of whether you should buy US equities now.
US-Wahlen

In the short term, our Chief Investment Officer Simon Lutz and his team see positive momentum for the equity markets. The pro-business agenda will stimulate growth and corporate profits. US equities, the US dollar and cryptocurrencies are likely to benefit from the implementation of the election promises. Rising inflation and interest rate risks, on the other hand, will have a negative impact on bond prices. In anticipation of a Trump comeback, the financial markets have already been moving in this direction for several weeks. We can well imagine that this price trend will continue, although further stock market developments will depend on many other factors.

In the long term, however, the downsides of his policies should also be kept in mind: Trade conflicts, the risk of inflation and increasing debt will weigh on future growth, weaken the US dollar in the long term and increase the risks.

Should you buy US equities now? We have long argued that US equities should have a permanent place in every portfolio. Anyone who does not yet have any US equities in their portfolio should do so. For those (like us) who already have substantial US exposure, there is no need to buy more. Following the strong outperformance since the beginning of the year (21% compared to the Swiss equity market, in CHF), US stocks are already trading at a significant premium (25% compared to Switzerland and 65% compared to Europe, measured by the P/E ratio for the next 12 months).

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