James Burns

Equities have had a mixed performance since the US presidential election on 5th November. US stock returns have risen compared to global equities (ex US) in sterling terms. This divergence can broadly be explained by investors’ anticipation of tax cuts and deregulation from the incoming Trump administration, as well as ongoing solid US economic fundamentals.

In contrast, UK chancellor Rachel Reeves’ tax raising budget did little to boost the domestic stock market. Elsewhere, European stocks appear in the crosshairs of potential tariff hikes under president-elect Trump, while the collapse of the German governing coalition has not helped either.

However, despite some geopolitical risks, both economic and company fundamentals remain strong. The ‘soft landing’ increasingly looks the likely path for the US economy, and Trump’s suggested policy agenda of tax-cuts and deregulation should prove a tailwind for equities.