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Wolfe Research identifies three phases of ‘Trump Trade’
Wolfe Research analysts are onto something interesting! They have outlined three distinct phases of what they call “Trump Trade,” set to shape 2025.
According to experts, these trading phases reflect shifts in market strategy and help investors navigate political uncertainty under the new US administration.
Wolfe Research predicts that next year, investors will price in the dynamics of “Trump Trade.” It breaks down into three stages. Phase one kicked in right after the election and is already behind us.
Phase two rolls in as the president-elect’s policies are debated and rolled out, taking center stage during the first 100 days. The third phase will deliver fresh data, revealing whether Trump’s policies boost or drag down economic growth.
In the first half of 2025, economists expect positive vibes across the stock market. Wolfe Research believes defensive growth stocks, including tech giants from the Magnificent Seven, will lead the charge. However, investors are likely to keep a close eye on tariff risks and other political wildcards.
By the second half of 2025, policies like deregulation and trade reforms should become clearer. Wolfe Research is betting these measures will benefit the financial sector, industrials, and consumer stocks.
At the start of Trump’s term, US political uncertainty could put a damper on enthusiasm for cyclical stocks. Some investors might lean towards long-term plays instead. Wolfe Research sums up that key legislation will likely act as a catalyst, driving market rotation by the end of 2025.
Published 28 December 2024
© InstaFintech Group
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© InstaFintech Group
