What are the next Trump trades?

Investing.com -- Donald Trump on Wednesday won the 47th US presidential election and secured his return to the White House.

Markets had largely anticipated this outcome, with the so-called "Trump trades" being active over the past few weeks.

However, according to Citi strategists, there are still some laggards that could see relative tailwinds from a Trump victory.

For example, the firm identified the UK market as a potential beneficiary of a Trump presidency. Similarly, European Health Care, India, and Saudi Arabia were also recognized as markets that could capitalize on Trump’s return.

On the other hand, strategists point out that while European Industrials were expected to face challenges under the Trump administration, the sector has performed well both in the pre-election period and on the day of the announcement.

“We would also note that our long/short Trump strategies have performed well in past weeks, but are yet to return to late-September levels, implying potentially more room to run,” strategists led by Beata M Manthey said.

The market's reaction to Trump's win was reflected in several key indicators. The U.S. dollar appreciated by 5%, U.S. Treasury yields climbed above 4.4%, and the U.S. market advanced 8% versus the Rest of the World (RoW).

Moreover, equity market positioning data from Citi Quants showed a nearly maximum long stance on the S&P 500 versus net shorts in developed markets excluding the U.S.

“Even with today’s price action, this all implies that a Trump victory had been priced to some degree heading into 5 November,” strategists noted.

Donald Trump, 78, reclaimed the presidency on Wednesday after surpassing the 270 Electoral College votes required for victory.

A crucial win in the battleground state of Wisconsin put the former president past the needed threshold. By 06:35 a.m. ET (0835 GMT) Thursday, Trump had accumulated 295 electoral votes, compared to 226 for Kamala Harris.

Source: Investing.com