With Trump's re-election as President of the United States and the prospect of the Republican Party controlling both the Senate and the House, the market expects his policies to deepen the volatility in the capital market, especially the impact on cryptocurrencies and U.S. stocks. Major investment banks, including JPMorgan Chase, Morgan Stanley, Goldman Sachs, and Citigroup, have conducted in-depth analyses on the potential impact of Trump's policy environment. The following summarizes their key insights and data, analyzing the opportunities and challenges for the cryptocurrency market and other assets under the "Trump trade".
JPMorgan Chase: Dual Boost from Deregulation and Tax Cuts
JPMorgan Chase believes that Trump's pro-business policies will benefit the U.S. technology and finance sectors through deregulation and further tax cuts. Specific international markets may also benefit from the rise in U.S. long-term interest rates and exchange rate volatility. Additionally, JPMorgan Chase points out that although the Trump administration may implement more trade policies on the high-tech industry, the short-term impact on the supply chain in some core areas may be lower than expected.
Morgan Stanley: Tariff Policies May Negatively Impact Certain U.S. Stock Sectors
Morgan Stanley's analysis suggests that Trump may once again push for tariff hikes, which will affect certain U.S. stock sectors that rely on international supply chains. For U.S. hardware manufacturers and other specific low-value-added products, the tariffs will significantly impact profitability. For example, the 2025 fiscal year earnings of hardware producers like Apple are expected to decline by 4-7%. Morgan Stanley notes that commodity-related products may benefit from the policy-driven increase in demand.
Goldman Sachs: Capital Inflow to the U.S. Boosts Industrial and Resource Sectors
Goldman Sachs expects that Trump's tariff policies may drive capital back to the U.S., further benefiting the industrial, automation, and infrastructure sectors. Additionally, Goldman Sachs predicts that the cryptocurrency market may benefit and accelerate its growth under Trump's low-regulation policies. However, Goldman Sachs also points out that due to the relaxation of energy policies, clean energy companies may face higher market volatility, while the traditional energy industry will be more resilient with policy support.
Citigroup: Tax Rate Cuts Boost Corporate Profits and Alleviate Valuation Pressure
Citigroup emphasizes that Trump's intention to further reduce the corporate tax rate from 21% to 15% will significantly boost U.S. companies' profit margins. Analysts expect the S&P 500's corporate earnings to be revised upwards by a few percentage points, boosting market confidence. However, the current P/E ratio of the S&P 500 has reached 21.9 times, exceeding the historical average plus one standard deviation of 20.7 times. Therefore, under high valuation pressure, Citigroup recommends that investors choose low-beta funds, such as the JPMorgan US Select Equity Plus Fund and the Neuberger Berman US Long Short Equity Fund, to reduce the risk of market drawdowns.
Opportunities and Challenges for the Cryptocurrency Market
Trump's advocacy for relaxed regulation of cryptocurrencies is expected to drive market demand and increase trading volume. However, at the same time, tariff and immigration control policies may increase inflationary pressure, keeping interest rates high. Currently, the U.S. core personal consumption expenditure (PCE) has remained at 2.7% for three consecutive months, indicating persistent inflation. The market has continued to downgrade the Federal Reserve's rate cut expectations, with only a 50-basis-point cut predicted for next year, and the U.S. interest rate is expected to reach 3.75-4% by the end of 2025, significantly higher than the 20-year and 30-year averages of 1.8% and 2.6%, respectively. In this high-interest-rate environment, the appeal of traditionally zero-interest cryptocurrencies is suppressed. Additionally, the 10-year U.S. Treasury yield has reached 4.3%, which has a particularly pronounced impact on the allocation of cryptocurrencies. We recommend that investors gain exposure to cryptocurrencies through structured tools or select related U.S. stock targets, such as Coinbase (COIN US), to convert zero-interest assets into interest-bearing instruments.
Conclusion
Trump's re-election policies may bring a series of opportunities and challenges to the U.S. stock and cryptocurrency markets. In the U.S. stock market, the technology, finance, industrial, and resource sectors are expected to benefit from the "Trump trade," but investors still need to be mindful of the impact of valuation levels. The cryptocurrency market may benefit from the relaxation of regulations, but in a high-interest-rate environment, investors need to be more cautious in their allocations to better manage potential volatility risks.
The above content is based on publicly available market information and is for reference only, and does not constitute any investment advice. The cryptocurrency asset market is high-risk, and investment requires caution.
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