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The new playbook

Just over a week after the elections and the impact of the new elected administration has been felt in the markets. It was confirmed yesterday that in fact was a sweep, as republicans reached 218 seats in the House, which gives full control of the White House, the two chambers of Congress, and the Supreme Court, where Trump made several appointments in his last administration that add up to a conservative majority. That has been interpreted by the markets as very bullish, as he should not face much resistance when he tries to implement new measures, even when acknowledging that Trump likes to use executive orders. In the chart below you can see a selection of assets and their performance over the last 6 trading days after the election. Crypto has really benefited so far from it with returns that dwarf the ones from the rest of assets. Tesla, banks and small caps have also gone up nicely, exhibiting returns associated with months or years rather than just a week. The losers? China, commodities and Treasury bonds. Tariffs, nearshoring and deregulation are the main items in the playbook and the market is reading it to the dot.


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