Ahead of President-elect Donald Trump's inauguration, the financial markets are paying close attention to his first executive order. Depending on its content, the early days of the administration may turn into either a Trumpism risk or a Trump honeymoon. The inauguration ceremony will take place at 2 a.m. on the 21st, Korean Standard Time.
On the 20th, Park Sang-hyun, an iM Securities Research Institute analyst, noted, "The executive orders and measures that the financial market is focusing on are as follows: first, the executive order related to illegal immigration."
This means that the market will be interested in how many illegal immigrants will be deported, rather than measures to block illegal immigrants. This is because immigrants have a significant impact on the supply and demand of the labor market and wages. Park added that there is also a possibility that this could affect the U.S. Federal Reserve's (Fed) currency policy stance.
The second is the introduction of a universal tariff. Park stated, "Attention will also be paid to whether specific details and schedules related to the implementation of universal tariffs at the level of 10-20% will be announced." He emphasized that the key issue is whether tariffs will be introduced in a selective or gradual increase in universal tariff rates, as raised by some.
The third issue is the intensity of tariffs and regulations on China. President-elect Trump is likely to announce a strong tariff policy on China shortly after taking office. However, there are also expectations in the market for a scenario where tariffs serve as a springboard for actively negotiating with China.
On the 17th, President-elect Trump spoke with Chinese President Xi Jinping. After that, Trump mentioned, "This conversation was good for both China and the United States." Park noted, "Similar to during Trump's first term, it suggests a 'top-down approach' to solutions, indicating the need to keep an eye on future developments."
The fourth issue is measures related to the drilling of oil and natural gas. This is due to the recent surge in oil and natural gas prices. Park commented, "These measures will have a significant impact on the stabilization of prices and U.S. Government Bonds interest rates."
Lastly, there are policies related to virtual assets. During the election, President-elect Trump stated he would promote pro-virtual asset policies. Park added, "Whether it can break through previous peaks with pro-virtual asset policies after taking office will greatly influence the further increase of technology stocks, including the Magnificent Seven (Apple, Amazon.com, Alphabet, Microsoft, Meta Platforms, Tesla, Nvidia)."