Investors are speculating whether a Trump re-election in 2024 will ignite another stock market boom, much like in 2017. However, JPMorgan strategists caution that today’s macroeconomic landscape is vastly different from Trump’s first term, suggesting that markets may not follow the same trajectory.
? Key Market Differences: Then vs. Now
1?? Global Growth Was Stronger in 2017
Back in 2017, the global economy was experiencing synchronized growth, with the eurozone outpacing the U.S. in GDP expansion.
A major factor was China’s 2016 stimulus, which fueled a broad-based recovery across emerging markets.
This backdrop helped international markets outperform the S&P 500 in dollar terms.
? Current Reality:
The U.S. is now outgrowing Europe in 2024, and China’s post-COVID recovery remains fragile.
With weaker global growth, U.S. equity dominance may persist rather than shift to emerging markets.
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2?? Will the U.S. Dollar Repeat 2017’s Pattern?
During Trump’s first term, global growth narrowed the regional growth gap, weakening the U.S. dollar (USD) and boosting risk assets like emerging markets and commodities.
JPMorgan warns that this time, the dollar’s trajectory is uncertain, as trade tensions and higher-for-longer interest rates could strengthen the USD instead.
? Current Reality:
A stronger dollar would weigh on EM equities, commodities, and U.S. multinational earnings.
Unlike 2017, trade tensions are already a concern, potentially limiting global risk-taking.
? Commodity API → Monitor the impact of a stronger USD on gold, oil, and other commodities.
3?? Trade War Risks Loom Larger
2017 saw no major trade disputes, allowing markets to rally freely.
But by 2018, Trump’s tariffs on China sparked volatility, strengthening the dollar and disrupting supply chains.
? Current Reality:
Trump has signaled possible new tariffs on China and Europe, which could hurt global markets and raise inflation risks.
Trade uncertainty may limit the sector and regional leadership shifts seen in 2017.
? Company Rating API → Assess company exposure to global trade risks and tariffs.
4?? Bond Yields & Fiscal Deficits Are Higher Now
In 2017, U.S. Treasury yields were at 1.8%, leaving ample room for a reflation trade.
Today, bond yields remain elevated, and U.S. fiscal deficits have ballooned, limiting the Fed’s flexibility.
? Current Reality:
Higher yields may restrict economic growth and curb market enthusiasm, especially in rate-sensitive sectors like tech.
Fiscal policy uncertainty could add to market volatility if deficit concerns mount.
? Advanced DCF API → Evaluate how higher interest rates impact stock valuations.
? Investor Takeaways: What to Watch
Unlike 2017, growth leadership remains U.S.-centric, limiting international market upside.
The U.S. dollar’s path is uncertain, but potential trade conflicts could fuel dollar strength, hurting risk assets.
Bond yields are higher, and fiscal concerns persist, potentially capping equity gains.
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