Table of Contents:
Introduction to the impact of elections on markets
The recent American elections have aroused significant interest among investors and market analysts. Regardless of political views, the focus is on the economic and financial consequences that these elections may bring. With the return of figures like Donald Trump, financial markets have shown signs of enthusiasm, especially in the cryptocurrency sector, which has reached new highs. But how much of this optimism is justified?
Market assessments and future prospects
In recent years, the United States has seen a significant increase in market valuations, as evidenced by the CAPE3 ratio. This indicator suggests that the U.S. market is currently overvalued, with few historical exceptions exceeding current levels. The crucial question is whether the United States can maintain its leading position in economic growth. The companies that make up the group known as the ‘Magnificent Seven’, including Tesla and other big tech, are at the center of this discussion. While Tesla saw a 31.3% surge after the elections, other companies performed more moderately, in line with the performance of the
S&P 500.
Big Tech and political challenges
The relationships between the government and big tech companies are complex. Trump has historically had a conflicted relationship with companies like Alphabet and Meta, while others like Apple and Amazon face risks related to tariffs and access to the Chinese market. Future policies could significantly influence how these companies operate and develop. However, the ability of these companies to adapt and collaborate with the administration could determine their long-term success.
Geopolitical unknowns and inflation
Looking to the future, geopolitical unknowns, in particular relations with China, represent one of the greatest challenges. Trade policies, tax reforms, and immigration-related issues could have inflationary effects. Although Trump may try to stimulate the economy, this could lead to increased inflation, which could disappoint his more populist supporters. In addition, the large deficit and federal debt remain significant concerns, with interest spending becoming an increasingly important item in the federal budget.
Conclusions on the economic outlook
In summary, the American elections had an immediate impact on financial markets and cryptocurrencies, but future prospects remain uncertain. Investors need to consider not only current valuations, but also potential economic policies and geopolitical dynamics that could influence the market. With a particular focus on Big Tech and their relations with the government, the economic landscape could undergo significant changes in the coming years
.
