Market Turbulence: Winners, Losers, and the Trump Effect

November witnessed significant market shifts triggered by Trump's election victory, driving U.S. stocks and the dollar upwards while impacting European currencies and tariffs. December might bring volatility with potential bond market backlash. Bitcoin and tech stocks surged in November, but uncertainties loom ahead.

November brought a clear delineation of victors and vanquished following Donald Trump's U.S. election triumph on November 5. Trump's victory catalyzed significant market shifts, punishing tariff-sensitive assets from European exporters to Mexico's peso, while funneling investments towards U.S. stocks and the dollar, prompting a Wall Street rally.

However, the upcoming month could see turbulence as the 'Trump trade' faces potential backlash from the bond market against fiscal overspending. Tariffs loom as a threat to inflate prices and disrupt supply chains. BCA Research highlighted that elevated U.S. equity valuations reflect market complacency regarding a potentially challenging environment.

Highlighting key market responses, the euro experienced its largest monthly drop since early 2022, driven by U.S. tariff threats, political issues in Europe, and regional economic downturns. Analysts predict more currency market volatility as the U.S. economy's performance under Trump's policies remains under scrutiny.

(With inputs from agencies.)