Market Perspectives: What do the first 100 days of Trump mean for the next 1,361?

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

Anthony Willis

Senior Economist

Key Takeaways

The 30^th April marked 100 days of President Trump’s second presidency. It’s been an eventful period with early April’s tariff announcements triggering high volatility in financial markets.
It’s been a challenging period for investors and the fast-moving nature of events has made it hard to make decisions with any real conviction. Against an uncertain backdrop, gold has been a strong performer.
Turmoil in the Treasury market led to a pause in the implementation of many reciprocal tariffs – we are now in a 90-day period in which countries are negotiating trade deals with the US.
With lower approval levels, the President may look to turn the narrative towards more voter friendly policies like tax cuts. Given the implications of such moves however, it will be interesting to see how the bond market reacts.
The reshoring of manufacturing to the US will take time and empty shelves plus higher prices look likely in the meantime. Businesses will also likely want greater stability before making investment decisions.
Despite recent events the US economy looks set to outperform other G7 nations.

Transcript

The 30^th April marked 100 days since President Trump took office, which is often a time to reflect on the achievements or otherwise of an incoming president.

At his inauguration, Trump launched his Presidency with the promise of a new ‘golden age’ for Americans. He inherited an economy in robust health, but in the space of three months we have shifted to an environment of policy uncertainty at levels only seen during the Global Financial Crisis (GFC) and pandemic, and recession odds somewhere between 40% and 90% depending who you ask.

A huge amount has taken place in the past 100 days. Events have brought into question the narrative of US exceptionalism that has powered US equities to significant outperformance over recent years, led by the mega cap tech companies.

At times it has felt like ’everything, everywhere, all at once’. The policy of ‘flooding the zone’ with newsflow and policy announcements makes it hard to keep up. The challenge of analysing a constantly evolving backdrop makes it hard to make investment decisions with a high degree of conviction. For financial markets, the defining theme has been the move to the highest tariff regime since the 1930s.

What’s done well given such uncertainty? Gold is up almost 19%, plenty of assets when measured in US dollars given the currency has weakened considerably. Former safe havens such as the Dollar – the US dollar index has fallen -9.08% from 20 January to 30 April. In contrast, it was up 11.85% in the five years to 20 January 2025.

US equities welcomed the arrival of the President, expecting a repeat of Trump 1.0 – the S&P500 saw its best post-election gain on expectations of looser regulations and lower taxes that should boost growth. However, the Administration has focussed on the trade deficit, with a wave of tariff announcements leaving markets unsettled and the outlook uncertain.

We have seen huge volatility in the aftermath of the tariff announcements and even with the recovery over the second half of April which has erased the post ‘liberation day’ sell off they are still 8% below the all-time highs of 19^th February. The Administration appeared unconcerned over the stock market moves, with Scott Bessent, the treasury secretary calling the corrections ‘healthy’ and ‘normal’. The cracks that emerged in US Treasury markets during the most turbulent of weeks in early April have been the biggest restraint on the Administration, with the violent moves forcing a pause in the implementation of reciprocal tariffs. In the end, they were in effect for just 13 hours.

President Trump will want to move on from tariffs onto the more politically positive aspects of his agenda – primarily tax cuts. These will extend the cuts that began during his first administration. However, by the time the agenda turns to the tax cuts, the US economy may be showing signs of slowing, and it remains to be seen how forgiving the bond market will be to policies that increase the budget deficit further.

With his approval ratings on the slide, President Trump will want some voter friendly policies to be front of mind ahead of the mid-term elections, where the party controlling the White House traditionally loses seats. Defeat in the mid-terms, i.e. losing control of Congress to the Democrats, would likely see far higher levels of policy intervention and pushback than we are seeing at the moment.

The next few months should reveal how deep Trump’s ideology around tariffs will run. Supply chain issues, and empty shelves where goods from overseas once sat, or products suddenly on sale at significantly higher prices will further darken the mood.

The current 90-day tariff extension runs to 9 July, with markets expecting the current reprieve to be extended, or negotiated away for many countries. All the same, we will still be left with the highest rate of tariffs for 90 years. Smaller headline grabbing deals that are light on detail seem more likely. These will likely cover the likes of South Korea and Japan, as well as potentially India. Deals with the European Union and China look far more complex.

We are a long way from the ‘free trade’ era that ended when Trump 2.0 began, and a return to an effective tariff rate below 3%, as the US and its trading partners over recent years have enjoyed, appears a long way off.

Any boost to the domestic economy from manufacturing being brought home will not be felt for several years. It will likely take many years to replace goods made overseas and elevated input costs from higher wages implies price hikes. Businesses will not yet embark on shifting all their manufacturing to the US until they see stability and predictability.

It has been foolish to bet against the US over recent years, and only time will tell if the Trump era is a definitive shift to a much more isolationist America and a new world order. Despite all the noise, the US is still expected to see stronger economic growth than any other G7 country, this year and next. If the next 1,361 days are just a blip, then we expect the dynamism and entrepreneurial spirit of the US to prevail over the long term. Those positives will still be there even under an isolationist President, but an inward-looking US will be economically poorer, as will the rest of the world.

6 May 2025

2025年 May 06日

Key topics

Subscribe to insights

Get the most out of your email by tailoring the types of insights and information you would like to receive from us.

Latest articles

6 May 2025

2025年 May 06日

Market Perspectives: What do the first 100 days of Trump mean for the next 1,361?

The 30th April marked 100 days since President Trump took office, which is often a time to reflect on the achievements or otherwise of an incoming president.

1 May 2025

2025年 May 01日

Why the time is ripe for Europe

With the global economy shifting, the case for European equities is stronger than it has been in years. We look at the opportunity, why stock selection will be key to success, and why quality will win out.

28 Apr 2025

2025年 April 28日

In Credit Weekly Snapshot – April 2025

Our fixed income team provide their weekly snapshot of market events.

PDF

Market Perspectives: What do the first 100 days of Trump mean for the next 1,361?

Important information

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority. In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws. In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore. In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058. In Japan: Issued by Columbia Threadneedle Investments Japan Co., Ltd. Financial Instruments Business Operator, The Director-General of Kanto Local Finance Bureau (FIBO) No.3281, and a member of Japan Investment Advisers Association and Type II Financial Instruments Firms Association. In UK: Issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority. In the EEA: Issued by Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242, 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg. In Switzerland: Issued by Threadneedle Portfolio Services AG, Registered address: Claridenstrasse 41, 8002 Zurich, Switzerland. This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors’ with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

Related Insights

28 April 2025

Multi-Asset

Multi asset

Anthony Willis

Senior Economist

Will empty shelves in the US force further pragmatism around trade?

With signs of pragmatism emerging from the White House we have seen calmer conditions in financial markets.

22 April 2025

Multi-Asset

Multi asset

Anthony Willis

Senior Economist

Is the US heading for a self-inflicted recession?

The tariff uncertainty continues, and equity, bond and currency markets remain volatile.

14 April 2025

Multi-Asset

Multi asset

Anthony Willis

Senior Economist

Is the worst of the trade war already behind us?

The focus is on tariffs and their impact on financial markets, including wild swings in equities and a dramatic sell-off in US Treasuries and the US dollar.

1 May 2025

Equity

Francis Ellison

Client Portfolio Manager

Frederic Jeanmaire

Portfolio Manager

Why the time is ripe for Europe

28 April 2025

Fixed income

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – April 2025

Our fixed income team provide their weekly snapshot of market events.

28 April 2025

Multi-Asset

Multi asset

Anthony Willis

Senior Economist

Will empty shelves in the US force further pragmatism around trade?

With signs of pragmatism emerging from the White House we have seen calmer conditions in financial markets.

Important information

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

Market Perspectives: What do the first 100 days of Trump mean for the next 1,361?

Key Takeaways

Subscribe to insights

Latest articles

Market Perspectives: What do the first 100 days of Trump mean for the next 1,361?

Why the time is ripe for Europe

In Credit Weekly Snapshot – April 2025

Important information

Related Insights

Will empty shelves in the US force further pragmatism around trade?

Is the US heading for a self-inflicted recession?

Is the worst of the trade war already behind us?

Why the time is ripe for Europe

In Credit Weekly Snapshot – April 2025

Will empty shelves in the US force further pragmatism around trade?

Important information

Please confirm a few details about yourself to visit your preference centre

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.

CT Property Trust- Fund Manager Update