One Year Later: These Are The Best And Worst Performing Assets Under President Trump

"A Happy Trumpiversary to all our readers this morning"

       - Deutsche Bank

Today marks exactly 12 months since the US election on November 8th 2016, and as Deutsche Bank writes in "A Happy 12 Month Trumpiversary For Markets?" a lot has happened in the last year, although most surprising may be that for all calls of market collapse should Trump get elected, the S&P 500 has actually soared over 20% in the past 365 days according to Goldman which recently calculated that the Trump rally so far ranks as the fourth-best 12-month gain following a presidential election since 1936, trailing only Bill Clinton (1996, 32%), John F. Kennedy (1960, 29%), and George H.W. Bush (1988, 23%). 

As Deutsche Bank then picks up, "needless to say that the victory was unprecedented and also a massive shock around the world. Following Trump’s victory, it was widely expected that we’d see a much higher chance of fiscal spending but also a reinforcement of the backlash against globalisation and associated forces of which migration policy and trade were probably first and foremost. In reality what we have seen in the last twelve months is plenty of evidence of backlash against globalisation, hostility and controversy, but very little in the way of fiscal policy."

Here is the rest of Jim Reid's observations on how the market has progressed so far under president Trump.

The debacle around healthcare reform probably best characterises the difficulties the President has faced in that regard. So with today marking the one year anniversary, we thought we would take a look at how markets have performed over that time period. For the purpose of this we’ve included our usual monthly performance assets, as well as a few other US assets. First and foremost after running the numbers what stands out is the sheer number of assets which have seen positive returns. Indeed in USD terms, out of a sample of 41 assets, 38 have seen positive total returns.


As we know US equity market performance has been relentless. The S&P 500 has returned +23.5% over the last 12 months and has seen a positive total return in every month since Trump was elected. Interestingly this hasn’t actually been the best 12 month performance for the S&P 500 following an election. That award goes to the 1944 election victory for Franklin D. Roosevelt which saw the S&P 500 rally +36.8% in the year following. The twelve month performance post Trump ranks 7th in the last 23 elections. Meanwhile the Dow has rallied +31.5% and the smaller-cap Russell 2000 index has returned +25.4%. It hasn’t just been US equity markets that have seen blockbuster returns though. Indeed it’s very much been a global rally. The biggest winner is the FTSE MIB (+47.8%) while also in Europe the DAX has returned +34.1%, Stoxx 600 +27.9%, Greek Athex +38.2% and IBEX +24.9%. The UK’s FTSE 100 has returned +21.4% while in Asia the Nikkei is +25.5% and Hang Seng +30.7%.


In bond markets, as we know Treasuries have seen some huge ranges but ultimately performance has been benign. Indeed Treasuries have returned -0.1%. In fairness the big move for Treasuries came in the first few weeks of the election victory where we saw 10y yields spike nearly 80bps. If we take performance from the yield highs of last December then performance is actually more like +3.5%.  


More significant for bonds though has been the shape of the yield curve. Having spiked as high as 136bps, the 2s10s curve has now flattened to just 68bps and is at the flattest since 2007. The 5s30s curve (79bps) is also at the flattest in 10 years. Alternatively 2y yields have moved from 0.854% on election day to 1.629% now and the highest in the last year. 10y yields were at 1.855% on election day, touched as high as 2.626% in March and are now at 2.309%. The equivalent for 30y yields is 2.616% on election day, 3.212% high in March and 2.770% now.


So while equity markets may have benefited from high expectations for fiscal spending, US Treasuries have by and large priced out any expectation with each passing day under Trump’s presidency.


In terms of other markets, credit markets have returned anywhere from +2.9% to +14.4% with higher beta credit outperforming (HY and Sub-Financials). Emerging markets have also had been swept up in the rally with EM bonds returning +4.7% and EM equities +28.6%. Commodities have been more of a mixed bag. Gold is unchanged over the time horizon while Silver has dropped -7.8%. On the other hand Oil is up +26.6% and Copper +29.7%.


HRClinton LawsofPhysics Wed, 11/08/2017 - 14:07 Permalink

In theory, buddy. In practice, I'd like to see them try to figure out who has what. Especially if bought in cash and resting in an offline Cold Wallet. It's the cyber equivalent of buried gold. .Until you monetize** it and come out of the fog, it's merely an unusual "stock option", living on the Global Cloud.If/when they get desperate, they'll go after a much bigger and handier Piggy Bank: 401k and IRA accounts. What happened in KSA (massive asset seizure), should give everyone pause. In theory, they could come and seize the 30,000 acres that you farm -- if some entity with more pull than you wants it. Which is why, I suspect, that you're hedging your risk by building your own tribe. Hope it works out for you, but one never knows what indebted and desperate empires do. ** As I mentioned before in recent weeks... when the time comes to convert my crypto into fiat, I'll do it offshore -- in a "Tax-Friendly" region of the world. FBO of an LLC I'll set up, and keep it offshore. Which is what many US corporations do, to lawfully avoid (not evade) US taxes or Asset Forfeiture. 

In reply to by LawsofPhysics

Herdee Wed, 11/08/2017 - 11:47 Permalink

Still got a couple of years to go. Depend on the printing press and crooks running Washington. The fix is in by Central Banks, The Donald and The Senate. They can't have the pension funds all going bust, there are elections coming, the shysters want back into the corrupt power structure, they trade while in office, it's their own ponzi.

Dilluminati Wed, 11/08/2017 - 12:08 Permalink

This is like a football season reported at the 1st quarter in respect to Trump, and bottom of the 1st inning in respect to the ten year, and here is the difference.  The 30% or so you see in some frothy assets can go down, the 3% in the ten is garunteed.  We have to see how this game ends huh?

Hugh Mann Wed, 11/08/2017 - 12:20 Permalink

With the markets so heavily manipulated and the corruption so deep, the numbers don't mean shit. Anyone can put numbers on a piece of paper to serve any agenda and no one would be the wiser.

wally_12 Wed, 11/08/2017 - 14:01 Permalink

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Going to have to buy scuba gear to retrieve precious metals lost in the tragic boat accident in order to sell.

Conax Wed, 11/08/2017 - 14:50 Permalink

Farmers and hicks like me are getting the shaft here, corn down, silver in a smoking heap.. Trump hates me!Trump hates real money and food, too!Damn his eyes.