The re-election of Donald Trump introduces variables that could lead to short-term market volatility as new policies are implemented and existing ones are expanded or curtailed, Morgan Stanley wealth management policy strategists wrote this week.
During Trump's first term, optimistic trades around the general direction of the economy, corporate tax cuts and a trade war with China did not last, Lori Calvasina, global head of equity strategy at RBC Capital Markets, told CNBC this afternoon.
Investors are pricing in the potential impact of unfunded tax cuts on the federal deficit and the negative consequences of new trade tariffs, which include higher inflation, The Street notes.
The bond market has flashed warning signs around long-term inflation and government borrowing - sending 10-year Treasury yields to their highest level since early July.
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