A Decisive Realignment
- U.S. equity markets soared to record highs this week after President-elect Trump scored a surprisingly decisive election victory, including a likely "trifecta" of Republican legislative control in Congress.
- The outcome sparked powerful moves across global financial markets as investors priced in a combination of domestic-focused and "pro-growth" economic policies but also reflected concern over deficits and immigration policy.
- Characteristic of the "Trump trade" dynamic, smaller-cap companies led the surge, outperforming mega-cap technology and international-heavy peers. The S&P Small-Cap 600 soared 9%, outpacing 5% gains from the S&P 500.
- Real estate equities were laggards this week as benchmark interest rates hovered around four-month highs, offsetting some likely longer-term tailwinds related to tax policy and domestic-focused economic policies.
- Bond markets also posted strong gains this week - recovering from a brief post-election dip - after Federal Reserve Chair Powell stated that the Trump victory would have no "near-term" impact on U.S. monetary policy. While shorter-term rates rose on expectations of fewer Fed rate cuts, longer-term rates declined on a pull-back in inflation expectations.
Matteo Colombo
Real Estate Weekly Outlook
U.S. equity markets soared to record highs this week after former President Trump scored a surprisingly decisive election victory - including a likely "trifecta" of political control via Republican wins in the Senate and House - completing an unlikely political comeback
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