Jefferies said in his latest GREED & Fear book that Donald Trump winning a second term as US president was the greatest political comeback in American history. Taking note of the ‘returning child’ and ‘animal spirits’, the report stated that the financial markets’ initial reaction to Donald Trump’s decisive victory in the electoral college and, more surprisingly, in the popular vote, was what Greed and fear had been waiting for. — The US dollar rose, the stock market rose, and the US treasury bond market fell.

Dollar
As for the dollar, Jefferies said the 47th president-elect’s policy agenda is bearish for the dollar over the long term, even though the initial pro-growth orientation is seen as a positive for the dollar.

US stock exchange
“When it comes to the US stock market, if there is short-term upside in terms of the expectation of extended tax cuts and a wave of deregulation along with the unleashing of animal spirits, the risk for stocks is clearly that at some point the stock market will not move.” “We can ignore rising bond yields, but we have to admit that it has done this very well so far,” Jefferies said.

Jefferies said another negative for stocks is that the liquidity situation began to deteriorate at a time when valuations were at historically high levels.

bitcoin
Jefferies said Trump supported Bitcoin during his campaign, including creating an official US Bitcoin strategic reserve. Trump said he would create a national Bitcoin ‘stockpile’ using Bitcoin the US government already holds, which has largely been seized by law enforcement.

“The U.S. government currently holds approximately 208,000 Bitcoins, or 1 percent of the total maximum Bitcoin supply of 21 million. This is likely the reason why Bitcoin rose to an all-time high. Greed and fear are driving the 5 percent allotted to Bitcoin.” GREED & Fear global long-term equity portfolio,” he said.

Gold
Greed and fear also continue to be constructive on gold; Latest data from the World Gold Council confirmed that central banks continued to be net buyers of gold in the third quarter, albeit at a slower pace than in previous quarters. Thus, central banks purchased a net 694 tonnes of gold in the first three quarters of 2024, but net purchases fell from 305 tonnes in the first quarter of 2024 to 186 tonnes in the third quarter of 2024.

indian stock market
Jefferies said he sees the recent correction in the stock market as healthy, especially as it affects the most expensive part of the market, while relatively cheap private sector banks have started to perform better recently due to expectations of a possible decrease in the cash reserve ratio. It was stated that (CRR) will be purchased by the Reserve Bank of India in the coming months.