Trump Boosts the Market, Dividend Picks are the Next Episode
Whoever wins the White House today, US election boosts the market up.
Energy, manufacturing, and financial stocks will be favored by Trump Trade.
Boost purchasing power and trading ideas with CashBoost!
Market recap
US election boosts the market up. As you may have been heard from everywhere else, Donald Trump has declared victory in the 2024 US presidential election, telling jubilant supporters "we made history”. Donald Trump and Kamala Harris concluded one of the most tumultuous and dramatic presidential campaigns in modern political history with dueling rallies late last night. Tesla shares soar during after-hours trading as a Trump victory appears increasingly likely. Tesla shares surged more than 10%—exceeding a 52-week high ($273.54)—in overnight trading on Tiger Trade.
The outcome of US election will have significant global implications, making the whole world watch closely. Here are some:
1. Trade and Economy. A Trump victory could lead to increased tariffs and a more protectionist trade policy, potentially sparking trade wars.
2. Geopolitical Alliances. Under Trump, the US might reduce support for NATO and other allies, including Ukraine.
3. Environment and energy. The Republican Party places greater emphasis on the "affordability" of energy and electricity, and tends to support traditional energy sources with better economic benefits. There is a possibility of a shift in key policies such as environmental protection constraints, subsidies for new energy, and upstream oil and gas expansion.
Trump | Harris | |
Policy | More radical "America First" 1. Impose tariffs externally and reduce corporate taxes internally. 2. Support quality immigration and crack down on illegal immigration. 3. Support old energy and suppress new energy. 4. "America First" foreign policy strategy. | Or continue the current policy orientation 1. Advocate increasing taxes on the rich and large enterprises and reducing taxes for middle and low-income groups. 2. Expand legal immigration and curb illegal immigration. 3. Support the development of clean energy. |
Inflation | Push up inflation 1. The vast majority of the cost increase from tariffs will be borne by American consumers and importers. 2. Conservative immigration policies may lead to a decrease in the growth rate and deterioration of the labor structure. | Relatively small impact on supply-side inflation, mainly due to relatively more moderate tariffs and immigration policies. |
Economy | "Pulsed" boost Tax cuts promote accelerated corporate investment, but in the long term, trade protectionism and reduced immigration may drag down the economy. | Relatively moderate Tax increases may drag down growth to a certain extent, but overall it is more similar to the continuation of the current situation. |
Monetary Policy | Promote long-term interest rates Tend to adopt a loose monetary policy, which may increase the game with the Federal Reserve and bring uncertainty. | Probably stay unchanged. |
Fiscal Policy | Further increase in the fiscal deficit rate. The macro leverage ratio rises to 142%. | The increase is smaller than that of Trump. The macro leverage ratio rises to 133%. |
Get in the Ring
There is one fascinating factoid: A 12% rally yesterday lifted Reddit’s market capitalization to $21.5 billion. That makes $Reddit(RDDT)$ more valuable than Snap, which has four times as many users and four times as much revenue. Investors are a lot more confident about Reddit’s future than they are about Snap’s.
$SPDR Gold Shares(GLD)$ may gradually turn neutral, and the probability of gold moving upward from its high position may decrease, possibly entering a volatile trend. The reasons include: 1. There may be renewed inflationary pressure in the United States, and the extent of the Federal Reserve's interest rate cuts may be limited; 2. The continuation of moderate trade and monetary policies has a neutral impact on gold; 3. The Russia-Ukraine conflict will end as soon as possible; and 4. Central bank gold purchases may slow down slightly.
The Trump trade theme involves rising inflation, escalating trade frictions, and reduced geopolitical risks. The favorable assets include US dollar and policy-supported cyclical value stocks of sectors such as traditional energy, manufacturing, and finance. On the other hand, in the near term, better stay cautious about US Treasuries, gold, and Hong Kong stocks.
Dividend Play: A Safe Bay
In the current volatile market environment, dividend play, e.g. investing in high-dividend stocks, as an effective alternative to bonds, can provide stable returns for investors. High-dividend stocks typically refer to the stocks of companies that distribute high dividends. These companies often have stable profitability and good cash flow positions, enabling them to continuously distribute profits to shareholders.
Compared with bonds, high-dividend stocks have certain advantages. Firstly, the potential return on stocks is usually higher than that on bonds. Although bonds offer fixed interest income, the dividends of stocks may increase as the company's performance grows. Secondly, the liquidity of the assets is relatively good, making it easier for investors to buy or sell.
However, investing in high-dividend stocks is not without risks. Market fluctuations may cause the stock price to decline, thereby affecting the investor's returns. In addition, the company's performance may also be affected by various factors, resulting in a reduction or cessation of dividend distributions.
Therefore, when investing in high-dividend stocks, investors need to conduct thorough research and analysis. We should pay attention to factors such as the company's financial condition, operating performance, and industry outlook, and select companies with stable profitability and good development prospects for investment. At the same time, it is also necessary to reasonably control risks and avoid over-concentration in a single stock or industry.
SGX Dividend Play: $SIA(C6L.SI)$ $DBS Group Holdings(D05.SI)$ $Singtel(Z74.SI)$
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
