Comments (https://www.bloomberg.com/features/2024-trump-interview-transcript/) from former US president Donald Trump – who now looks likely to win the Presidential Election on 5th Nov 2024 – in an interview have sent shockwaves through capital markets, especially in the tech sector.
By suggesting that Taiwan should pay the US for defence and asserting that Taiwan has captured about 100% of America’s semiconductor business, Trump has ignited concerns about US-Taiwan relation and TSMC as well as the global semiconductor supply chain.
Also, in such interview, Trump called the dollar too strong and the Yen and Chinese Yuan too weak. Coincidentally, the yen climbed over 2 yen to the 156 range later following the article's release. Pressure for the yen's appreciation should also due to Bank of Japan’s intervention in currency markets.
Surging Yen caused various trades to unwind. We saw lots of volatilities these days.
Back in Trump’s first term, US stocks surged, especially in tech, financials, industrials and energy. The Tax Cuts and Jobs Act of 2017, which reduced corporate tax rates, was a major win for tech companies, leading to increased investments, stock buybacks and dividends. The S&P 500 rose nearly 50% from Trump’s election until the beginning of the COVID-19 pandemic.
Stock markets usually respond more to earnings forecasts and economic fundamentals than to trending political news. But now seems political issue becomes more influential.
A potential Trump victory in 2024 could have significant impacts on the bond market, and we have warned the uncertain inflation outlook in 2025/26.
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