The Trump's Economic Jigsaw: Winners, Losers, and the Road Ahead

Donald Trump's U.S. election victory in November sparked significant market reactions. Winners included U.S. stocks and the dollar, while assets sensitive to tariffs, like European exports and Mexico's peso, faced challenges. December poses risks, potentially impacting bonds and global economic perspectives, notably with bitcoin's surge and tech threats.

In November, the electoral triumph of Donald Trump proved to be a significant driver for the markets, defining clear winners and losers. The so-called 'Trump trades' effectively punished tariff-sensitive assets from European exports to Mexico's peso, while directing investments towards U.S. stocks and the dollar.

However, December brings potential market volatility. The highly-valued U.S. equities could be at risk from a bond market reaction against fiscal expansion, and tariffs threatening to raise inflation and disrupt supply chains. BCA Research mentioned, "Elevated U.S. equity valuations reflect complacency as the more challenging environment we expect is not priced in."

Specific market segments such as currency, cryptocurrency, tech stocks, banking, and bonds exhibited notable movements. Investors must now assess whether Trump's policies signal a fundamental economic shift or represent temporary instability.

(With inputs from agencies.)