Trump 2.0’s performance under the magnifying glass of the markets

With the entry of Trump 2.0Wall Street and Main Street can win, just as they did with the Trump 1.0; That is, a favorable market for investors is expected.

Tomorrow the Donald Trump administration begins in the United States, with tax cuts and tariff increases in sight, volatility in the financial markets will exist, but economic strength and the best company reports must be recognized and prioritized, as happened during Trump’s first term, which began on January 20, 2017.

Hedge fund magnate Scott Bessent, Trump’s pick to lead the Treasury Department, declared that the next administration will benefit both Wall Street and Main Street (Main Street can be used to describe individual investors who typically invest small amounts; in contrast, Wall Street represents professional investment managers and securities traders).

Corporate benefits

The promise to cut the corporate tax rate, which was already reduced to 21 percent during his first term in office, to 15 percent, is only for companies that choose to manufacture in the United States.

We may not like Trump, but we must recognize that he favors businessmencommented Carlos Ponce, founding partner and general director of SNX.

The stock market specialist recalled that on December 22, Trump signed the reform called Tax Cuts and Jobs Bill Actwhich seeks to achieve the greatest tax reduction for American families, and favors employment with significant tax reductions for large companies.

In his first term, the corporate tax reduction was from 35 to 21 percent. After the announcement, the United States stock market saw a strong advance, which was interrupted in March 2018 when the trade war with China (tariffs) began. Volatility continued, and in 2018 the S&P 500 was down more than 4 percent. However, since the tax cut, the S&P 500 advanced 40 percent in a period of two years (December 21, 2017 to February 14, 2020).

The recovery was interrupted in 2020 due to the covid-19 pandemic.

In 2025 there will be similar events, but with greater speed than in Trump’s first term, since Congress supports him and today he has more experience. Volatility is expected, but also a final recognition for economic strength and better corporate resultsPonce predicts.

The future

Trump will return to the White House with stronger ties to some of the country’s richest and most influential people, including Meta CEO Mark Zuckerberg; that of SpaceX (aerospace manufacturing), Elon Musk, and the founder of Amazon, Jeff Bezos, from whom Trump wants to get ideas.

With the experience of his first term, Trump is expected to be more careful in announcing and executing his proposals. The magnate has been characterized by measure the success of his performance as president based on the behavior of the United States stock market. He knows very well that much of the behavior of the stock markets in the coming months depends on him today, stated Carlos Ponce.