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USA. Republican Donald J. Trump has been proclaimed the 47th president of the United States, after a surprise victory over Vice President Kamala Harris.
This return to power, which makes him the second president to serve non-consecutive terms, has generated great expectations and uncertainties in the global economic scenario. His record and the policies implemented during his first term have put analysts and market players on alert, who anticipate potential effects on trade, finance and global growth.
Donald Trump’s victory: reactions in the financial markets
After the election, investors began to anticipate that Trump’s policies will boost both economic growth and inflation. This perception strengthened the dollar, which rose 1.7% against a basket of rival currencies (euro, yen, pound, among others), registering its biggest rise since the Brexit referendum in 2016. On Wall Street, the S&P index 500 rose 2.1%, while the Nasdaq advanced 2.3%. Bitcoin also reflected optimism by rising more than 9% overnight Tuesday in anticipation of Trump’s victory.
Despite this initial optimism reflected in the VIX (Wall Street’s measure of expected volatility in stock prices), which fell to its lowest level since September, the 10-year Treasury yield rose by 0.17 percentage points, standing at 4.46%, its highest since July. It should be remembered that yields move in the opposite direction to prices.
As for stocks, Tesla, whose CEO Elon Musk has openly expressed his support for Trump, saw a rise of up to 13% in New York. U.S. bank stocks also posted gains, boosted by expectations that under Trump, interest rates will remain high and financial regulation will be loosened. Private equity firms such as Apollo Global led the gains with a 10% increase, while KKR and Blackstone advanced 7% and 3%, respectively.
Trump’s victory could intensify volatility in the financial market, especially affecting the technology and industrial sectors, due to their exposure to possible changes in trade and tax policies. This context of uncertainty could cause significant fluctuations in the prices of stocks, currencies and bonds, affecting investors and pension funds around the world.
International trade and geopolitical tensions
During his first term, Trump implemented protectionist policies, especially in relation to China, and is likely to maintain this stance. This could include the reintroduction of tariffs on imported goods and restrictions on global value chains.
Although Trump has described Chinese President Xi Jinping as “a good friend,” he has expressed his willingness to apply high tariffs as a pressure tool. Recently, he stated that to deter China from invading Taiwan, he would consider imposing tariffs of up to 200% or even cutting off trade completely.
An increase in trade tensions would affect both major economies and emerging markets, including Argentina, which could face greater challenges exporting to key markets.
Energy and environment
Trump has shown clear support for fossil energy and promised to reverse much of President Joe Biden’s climate agenda, which could reduce investment in renewable energy globally. US oil majors ExxonMobil and Chevron rose 2.5%, even though the strengthening dollar negatively impacted oil prices.
By contrast, renewable energy companies in Europe experienced declines, amid fears that Trump will eliminate tax breaks and subsidies granted by the Biden administration. Ørsted, Denmark’s largest offshore wind farm developer, saw a 12% drop, while turbine maker Vestas fell 11%. The S&P Global Clean Energy index, which groups the main clean energy companies, fell almost 3%.
In a context where climate change is a central issue, this shift in US energy policy could have lasting effects on the stability of oil prices and sustainable development.
Argentina and the region
Although Latin America was not a central issue in the campaign of any of the American candidates, beyond their immigration policies, Trump’s return to the White House could provoke important changes in the region. Among them, renewed protectionism and less strict fiscal and environmental regulation are anticipated.
For Argentina, which currently maintains a favorable political relationship with the United States, it will be essential to monitor these developments and prepare for possible changes in external demand, foreign investment and stability of financial markets.
