US Presidential Election: Chen Zhenglun on Trump’s Victory and Market Impact

2024-11-06 HKT 23:55

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  2024-11-06%20HKT%2023:57″ title=”Chen Zhenglun said that Trump’s policies may push up medium and long-term inflation, and the pace of interest rate cuts may slow down in the future. (Hong Kong and Taiwan pictures)”>

  Chen Zhengluo said that Trump’s policies may push up medium and long-term inflation, and the pace of interest rate cuts may slow down in the future. (Hong Kong and Taiwan pictures)

Chen Zhengluo, Senior Investment Strategist, Standard Chartered Wealth Solutions

Trump announced that he had won the U.S. presidential election. The three major U.S. stock indexes all hit new highs in the early hours. The U.S. dollar and Bitcoin also performed well, while the RMB, oil prices, and gold prices came under pressure.

Chen Zhenglun, senior investment strategist at Standard Chartered Wealth Solutions, believes that the U.S. financial market welcomes Trump’s victory in the election. The Republican Party will regain control of the Senate and also have a chance to win control of the House of Representatives. He estimates that Trump may further cut corporate taxes, which will be beneficial to corporate profits, thus benefiting the performance of risk assets such as U.S. stocks.

Chen Zhengluo reminded that we should pay attention to the results of the Federal Reserve’s interest rate meeting announced in the early morning of this Friday, Hong Kong time, because Trump’s policies may push up medium and long-term inflation, and the pace of future interest rate cuts may slow down, which will be detrimental to the performance of U.S. stocks. He said the market’s forecast for an interest rate cut by the end of next year has narrowed to 100 basis points from the 120 basis points estimated on Tuesday.

He also mentioned that if the United States imposes additional tariffs, it will affect the performance of Chinese assets. If more policies are announced at the National People’s Congress Standing Committee meeting that ends on Friday, it should be able to offset the impact of the US election on Hong Kong stocks.