Speculation grows about the potential for a Trump re-election in 2024 to ignite another stock market boom similar to the surge seen in 2017. However, JPMorgan strategists caution investors that today’s macroeconomic landscape significantly differs from Trump’s first term, suggesting varied market trajectories.

Key Market Differences: Then vs. Now

1. Global Growth Dynamics

• In 2017, the world experienced synchronized growth, with economies like the eurozone outpacing the U.S.
• China’s stimulus efforts bolstered a widespread recovery across emerging markets.

The current reality shows a divergent landscape, with the U.S. now outpacing Europe, yet China’s recovery appears sluggish.

2. U.S. Dollar Fluctuations

• During Trump’s first term, the dollar weakened as global growth narrowed regional disparities.
• Today’s currency trajectory remains uncertain, influenced by higher interest rates and trade tensions.

3. Trade War Risks

• The absence of significant trade disputes in 2017 allowed for market rallies, unlike the current environment strained by potential tariffs.

Trump’s latest signals regarding tariffs on China and Europe add to market volatility concerns.

4. Higher Bond Yields & Fiscal Deficits

• The current high treasury yields and burgeoning U.S. fiscal deficits may limit economic growth and challenge investor optimism.

Investor Insights: What to Watch

• Markets may not see the same growth leadership they enjoyed in 2017; continued U.S. dominance may be necessary
• Trade wars and increases to the dollar value have implications for risk assets.

As the 2024 election approaches, keen attention is required to monitor evolving market conditions and geopolitical developments that influence investor sentiment.