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Market Update: Post-Election Outlook and Opportunities in Trump 2.0

Shreemati Varadarajan

Chief Investment Officer - Synergy Financial Advisers

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  • With Donald Trump securing a second term, markets are responding to anticipated policy shifts. Here’s what this means for our clients’ investments and some key strategies to consider.

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  • Economic Outlook Trump’s projected victory and a Republican Senate majority suggest a business-friendly approach, though a split Congress could moderate major policy changes. Markets expect steady growth in 2025, with inflation slightly elevated if tariffs are implemented quickly. For now, growth looks modestly positive as tax and energy policies take shape, possibly leading to further economic gains down the road​.

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  • Fixed Income and Currency Insights U.S. Treasury yields have been rising, particularly for long-term bonds, as investors anticipate higher inflation and fiscal spending. Shorter-term bonds and floating-rate instruments offer potential stability in this environment. The U.S. dollar has also strengthened, supported by high bond yields and solid economic data. For international investments, hedging against dollar fluctuations could be beneficial​.

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  • U.S. Equity Opportunities U.S. equities have responded positively, especially domestic-focused sectors such as financials, energy, and industrials. Trump’s potential tax reforms could add up to 4% in S&P 500 earnings by 2026, with U.S.-centric small- and mid-cap companies particularly well-positioned. The energy sector, trading at a favorable 13x P/E ratio, may benefit from a supportive oil and gas policy. At the same time, high-quality tech stocks with minimal regulatory concerns could also offer growth potential. Selective exposure in these areas may allow you to capitalize on the market momentum​.

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  • International and Emerging Market Considerations International markets, particularly in Europe, may face headwinds from trade tariffs. Emerging markets might see increased volatility if U.S.-China trade tensions rise, with countries like Mexico facing challenges. However, markets like India may benefit from supply chain shifts away from China. Consider high-quality bonds or resilient sectors insulated from tariff impacts ​for emerging market exposure.

 

  • Actionable Strategies- Strategic Client Guidance: 

  1. Focus on U.S. Domestic Stocks – Highlight the potential benefits for U.S.-centric small and mid-cap stocks, particularly in financials and industrials. These sectors may be well-positioned to gain from possible tax cuts and business-friendly policies.

  2. Adjust Fixed Income for Stability – Consider floating-rate and shorter-duration bonds to navigate rate volatility. Consider allocations to investment-grade U.S. bonds, which may offer stability as long-term yields fluctuate.

  3. Selectively position Tech and Energy Exposure – Quality tech firms, especially those involved in AI and automation and U.S. energy stocks that capture growth from oil and gas while balancing potential risks in renewables, could benefit from reduced regulatory pressure and supportive policies.

  4. Hedge International Investments – A stronger dollar may impact global returns; hedging currency exposure where possible can help.

  5. Choose Resilient Emerging Markets — For diversification, focus on emerging markets less affected by US-China dynamics, such as India. Look for high-quality emerging market bonds that may offer stability amidst potential volatility.

 

  • As policies solidify, we’ll continue adjusting portfolios to align with risk profiles to deliver risk-adjusted performance to clients.

 

  • Please feel free to reach out to us if you have any questions or want to discuss specific recommendations.

General Advice Disclaimer

The information in this publication or any dissemination of information in any form is not intended to be and does not constitute financial advice, insurance advice or any other advice or recommendation of any sort offered or endorsed by Synergy Financial Advisers.

The information is not to be relied on as investment, legal, tax or other advice as it does not take into account the investment objectives, financial situation or particular needs of any specific investor.

References may be made to past performance of investment products and it may not be indicative of future results. Buying insurance policy or investment product may require long-term commitment. An early termination of the policy or product usually involves high costs and the surrender value payable may be less than the total amount paid. Please refer to the relevant documents such as product summary or policy contract for the exact benefits and features.

If you need clarification, please do not hesitate to ask your adviser. You should not make any decision based on the information without undertaking independent due diligence and consultation with your adviser.

The information provided and / or this advertisement has not been reviewed by the Monetary Authority of Singapore.

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