ANALYSIS: Markets go from anticipation to concern as ‘Trump options’ disappear

Institutional analysts say the ‘Trump Option’ no longer exists. The evidence is that US stocks have wiped out almost all of their big gains since (Trump's) election day, a decline that has also spilled over into bitcoin and other risk assets. Expectations of deregulation, tax cuts and other fiscal stimulus from President Trump have been replaced by concerns. Chris Galipeau, senior market strategist at Franklin Templeton Investments, said, ‘There's a lot of uncertainty created by the chaos in the U.S. government. It's literally a fire started by Trump.’ Benoit Anne, managing director at Legg Mason Investment Management, said the trade war is a risk to economic growth in the U.S. and the rest of the world. The stock market is reflecting this, U.S. stocks are no longer going all the way up, the situation is now much more complex and volatile. galipeau said, ‘the worst may soon be behind us, the stock market is now in a “discounted sale” situation and earnings growth is expanding, which is a positive factor. Mid-cap and small-cap value stocks look particularly attractive. With AI-related trades ‘increasingly unsupported,’ even the tech sector's ‘Big 7’ are close to being good bargains.’