Bloomberg Television - Expect More Market Volatility Under Trump: Evercore's Emanuel
The current bull market cycle is anticipated to persist, albeit with more volatility due to high earnings multiples. The Trump administration's policies, similar to those in 2018, are expected to contribute to this volatility, particularly affecting small caps, which are currently undervalued and overlooked. The economic analysis suggests a downward trend in inflation, with expectations set towards a 2% target, despite recent market skepticism. The election outcome provided clarity, reducing political uncertainty and potentially boosting market confidence. Key sectors expected to lead the market include consumer discretionary, communication services, and infotech, continuing the trend seen in previous years. While there are pockets of speculative enthusiasm, such as in cryptocurrencies, these are not expected to dominate the market, with traditional bull market leaders maintaining their position.
Key Points:
- Bull market to continue with more volatility due to high earnings multiples.
- Small caps are undervalued and expected to gain attention.
- Inflation is expected to trend lower towards 2%, reducing market uncertainty.
- Election clarity boosts market confidence, reducing political risk.
- Consumer discretionary, communication services, and infotech to lead market growth.