Source: Fortune
Summary
The Trump Trade, a stock market strategy based on President Donald Trump’s economic policies, has slumped 16% since May due to the US conflict with Iran, which has pushed up energy prices, inflation expectations, and interest rates. Many Trump Trade bets posted double-digit percentage gains in the first quarter but eventually flipped into the red. Investors who bet on the success of Trump’s agenda faced disappointments, including the Iran war’s negative effects on the economy and the outperformance of AI-investing themes. Fund flows point to a steady stream of investors abandoning some of the trades.
Our Reading
The numbers tell one story.
The Trump Trade’s breakdown is mostly due to the US conflict with Iran, which has pushed up energy prices and inflation expectations. The slide comes after many Trump Trade bets posted double-digit percentage gains in the first quarter. Investors who bet on the success of Trump’s agenda faced several disappointments, including the Iran war’s negative effects on the economy. Fund flows point to a steady stream of investors abandoning some of the trades. The Trump administration’s move to replace the expired tariff with targeted actions under Section 338 of the Tariff Act of 1930 has added to the uncertainty. Now is really not the time to be pressing this, says Mark Malek, chief investment officer at Muriel Siebert.
Author: Evan Null
