Donald Trump’s triumph in the election triggered tremors across the financial landscape — and the markets continue to ascend. Stock prices have surged to unprecedented levels, as the Dow Jones Industrial Average surpassed 44,000 for the first occasion. Investors are banking on accelerated economic expansion and increased government deficits stemming from Trump’s proposed initiatives.
Historically, December has never recorded such a low in an election year when the S&P 500 gained 10% or more by the midpoint.
Heard @fundstrat mention this earlier today on @SquawkCNBC, and I had to investigate further. Great insights, Tom. pic.twitter.com/AcxD67ceaW
— Ryan Detrick, CMT (@RyanDetrick) December 2, 2024
In contrast, the bond market is exhibiting signs of unease. Treasury yields have surged, fueled by expectations of economic prosperity and the election’s results. Investors are apprehensive that Trump’s tax reforms and substantial tariffs may ignite inflationary pressures.
In 9 out of the last 10 Decembers during election years, the stock market rose. pic.twitter.com/Ey8davLhd9
— Ryan Detrick, CMT (@RyanDetrick) December 2, 2024
Rising interest rates could lead to higher borrowing costs for both businesses and individuals. Despite these worries, stock market participants appear unfazed at this moment. They are excited about the prospect of a business-friendly administration advocating for tax reductions and deregulation.
Stocks to monitor | 📊 Get ready, get set, trade! Keep an eye on these stocks as they energize the market #StockMarket pic.twitter.com/j0nEYsrY0Y
— ET NOW (@ETNOWlive) December 3, 2024
Ed Yardeni, the president of Yardeni Research, stated, “The animal spirits have returned.”
Stock market: A gain of Rs 2.3 lakh crore in market capitalization for the top 10 companies! LIC spearheads the increase — full list https://t.co/GLWBhBainb
— ET NOW (@ETNOWlive) December 1, 2024
Several stocks have outperformed even Tesla since the election outcome.
Trump’s victory drives market excitement
Private prison firms CoreCivic and Geo Group, which serve as contractors for Immigration and Customs Enforcement, have experienced their stock prices rise by over 75%.
Stocks related to cryptocurrency have also seen remarkable increases, as Bitcoin ascended to an all-time high beyond $86,000. The nomination of Tom Homan as Trump’s “border czar” has further buoyed private prison stocks. Homan has called for a “humane” yet “necessary mass deportation operation.” Geo Group’s chairman, George Zoley, anticipates government funding for 70,000 to 100,000 beds in ICE detention facilities, nearly double the current capacity.
Bitcoin topped $88,000 for the first time on Monday as the post-election surge continued. Influential figures in the cryptocurrency realm, including the Winklevoss twins, contributed substantial donations to support Trump. Super PACs have also accumulated over $100 million to elect congressional candidates who favor cryptocurrency.
Some investors express concerns that the markets might be overextending themselves. Trump has provided only a few specific details about his future plans. Mark Hackett of Nationwide cautioned, “Investors should remain vigilant to ensure that enthusiasm doesn’t overshadow fundamentals and introduce unwarranted risk.”
This scenario necessitates careful observation as escalating Treasury rates could pose potential threats to economic stability.
Nevertheless, the stock market currently revels in Trump’s anticipated return to the presidency.
