The uncertain landscape surrounding the incoming Trump administration’s policies creates mixed market signals as investors approach 2025. Annex Wealth Management chief economist and strategist Brian Jacobsen joins Morning Brief to analyze these factors and their market implications.
Jacobsen suggests investors can "enjoy" the current Santa Claus rally while maintaining caution, noting that "the good feelings eventually do likely need to come to an end."
Looking ahead to 2025, he identifies shifting sentiment as a key risk. He emphasizes that if anticipated policies like deregulation and Tax Cuts and Jobs Act (TCJA) tax-cut extensions fail to materialize or are delayed, "that could be the dislocation opportunity that we’re looking for," potentially creating both a market correction and buying opportunity.
January’s market volatility, according to Jacobsen, will largely depend on President-elect Trump’s Inauguration Day priorities. "Does he come out swinging with tariffs first day? What are the executive actions that he takes? Those are the things that can really … shake the snowglobe of the markets," he states.
However, Jacobsen expects an "intense" first quarter as the new administration takes office, citing ongoing inflation uncertainties and congressional gridlock, warning that "the combination of those could come to a head."
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