Trump’s win sparks market rally as China extends lead in global innovation

Post-election market winners and losers: Bitcoin surges, safe havens slip

What the chart shows

This table provides a comparative view of the performance of key asset classes from 4 November to 13 November, capturing the immediate market reaction to Donald Trump’s election victory on 5 November. Asset classes are categorized by percentage changes, highlighting the top-performing and underperforming segments.

Behind the data

Trump’s victory triggered significant rallies in certain asset classes, led by Bitcoin, which surged to a new all-time high as renewed optimism in digital assets drew investors to cryptocurrencies. US equities also reacted positively, with small-cap stocks outperforming as investor optimism favoured growth-focused domestic assets. This highlights optimism in sectors more closely tied to the US economy, reflecting expectations that Trump’s policies could favour domestic industries.  

In contrast, traditional safe-haven assets such as gold, crude oil and emerging market (EM) equities saw declines. Gold faced selling pressure as investors reallocated toward higher-risk assets expected to benefit from potential growth-friendly policies. Crude oil’s decline mirrors similar investor shifts. Chinese and European equities also underperformed, a sign of apprehension over potential trade realignments and economic impacts stemming from renewed US policies.  

USD strengthens post-election, echoing 2016 gains against global currencies

What the chart shows

This chart tracks the performance of the US dollar against a range of global currencies following the US presidential elections in 2016 and 2024. It compares the one-, two-, and three-month performance after Trump’s 2016 victory with the post-election reaction this year. Shaded areas indicate the range of USD strength during the initial three-month period following the 2016 election, providing a historical benchmark against which current movements can be assessed.  

Behind the data

Following Trump’s 2016 victory, the USD Index experienced a steady rise, fueled by expectations of tax cuts, growth-focused policies and heightened geopolitical tensions that increased demand for the dollar. The currency’s strength was particularly notable against the Turkish lira (TRY) and Mexican peso (MXN), reflecting regional uncertainties and the prospect of potential trade disputes.

This year, a similar trend of USD appreciation is emerging as markets respond to anticipated policy shifts under Trump’s leadership. The dollar strengthened broadly in the days following the election. While initial gains are strong, the duration of this rally may depend on future macroeconomic variables such as interest rate differentials and growth expectations, which could alter dollar movements as 2025 approaches.  

Major coins outshine Altcoins amid post-election crypto rally

What the chart shows

This chart compares the performance of two composite indexes in the crypto market: the Major Coin Composite Index and the Altcoin Composite Index. The Major Coin Composite includes cryptocurrencies with a market cap exceeding 1% of the total crypto market, while the Altcoin Composite represents those with a market cap below 1%. To improve comparability, the data was standardized and smoothed over a one-week period. This chart highlights the diverging performances of major and smaller-cap coins, particularly around key market events and regulatory developments.

Behind the data

Trump’s election victory triggered a post-election wave of euphoria in the crypto market, led by high-profile coins like Bitcoin and Dogecoin, which captured much of the spotlight as investors redirected funds towards these major assets. This shift toward major coins had been developing since early 2023, driven by a cooling crypto market and regulatory shifts, such as the SEC's approval of spot Bitcoin ETFs.  

Historically, altcoins have been highly volatile and even occasionally outperformed major coins, as seen during the 2022 crypto rally. But the trend reversed in 2023, as broader market slowdowns and changing investor sentiment favoured more established cryptocurrencies. Trump’s re-election further amplified this trend, with major coins reacting more strongly than altcoins in the recent post-election rally.

VIX and MOVE indexes fall as markets stabilize post-election

What the chart shows

This chart compares equity volatility (VIX index) and bond market volatility (MOVE index) following Trump’s victory, showing how volatility in both types of securities has shifted in response to the US election outcome.

Behind the data

Trump’s decisive victory removed a major source of uncertainty from the stock market, resulting in a drop in the VIX index, a.k.a. the market’s "fear gauge." Last Thursday, the VIX dropped to 15.20 and has since fallen further, dipping below 15, indicating reduced risk perceptions among equity investors. The MOVE Index provides a complementary view, showing how both equity and bond market investors are adjusting their expectations in the post-election environment.

US-China tensions reshape global trade flows

What the chart shows

This chart displays shifts in regional market shares for US imports and Chinese exports from 2018 to the present, covering the period when tariffs and trade tensions between the US and China intensified. It is designed to show how the US-China trade war and other geopolitical factors have influenced global trade flows.  

Behind the data

The US-China trade war has reshaped global trade patterns, driving notable shifts in the market shares of US import sources and Chinese export destinations. These changes reflect adjustments made by countries and businesses in response to tariffs and geopolitical risks, with many countries realigning their trade relationships accordingly. Since 2018, China’s share of US imports has declined by more than five percentage points to 12.2%, while Chinese exports to the US have decreased by over 2.5 percentage points to 15.5%. At the same time, other regions, particularly ASEAN (Association of Southeast Asian Nations), have seen increased shares in both US imports and Chinese exports, indicating their growing role in global supply chains.

Slowbalization: Global trade openness stalls and growth slows post-GFC

What the chart shows

The chart provides a long-term view of global trade openness and trade growth from 1970 to the present. The top pane displays global trade openness, highlighting the average levels from 2010 to 2017 and from 2018 to the present. The bottom pane shows global trade growth, comparing trends before and after the Global Financial Crisis (GFC) and the US-China trade war.

Behind the data

The end of the Bretton Woods system in the 1970s marked the start of a more market-driven exchange rate era. During this period, trade liberalization expanded, particularly in emerging markets where trade barriers were gradually lowered. These developments fostered greater economic integration, leading to a steady rise in global trade openness and annual trade growth rates averaging around 10%.

However, since the GFC, trade reforms have slowed, influenced by US-China trade tensions and other geopolitical conflicts. This has led to increased regionalization and slower growth – a phenomenon often referred to as “slowbalization.” The trend reflects a move away from rapid globalization toward more regionally focused trade networks, with global trade openness stagnating and trade growth slowing since 2018.  

China outpaces the US in global innovation race

What the chart shows

This chart displays granted patents from the World Intellectual Property Organization since 1986, with shaded areas representing the share of patents granted to each region or country. In 2023, China accounted for nearly 46% of all patents granted globally, a figure nearly three times that of the US at 15.7%. In other words, out of about 2 million patents granted worldwide, 920,000 were awarded to China – reflecting the country’s increasing prowess in innovation, research and technology.  

Behind the data

China has emerged as a leading source of innovation, with patent activity surging over the past 20 years due to heavy investment in research and development. China’s R&D budget has grown 16-fold since 2000, according to The Economist, and its emphasis on fields such as biotechnology, quantum computing, telecommunications and artificial intelligence has propelled it to scientific prominence. This intense focus on intellectual property comes as the US and China intensify a technological arms race, where control over patents and proprietary technologies will be critical in securing leadership in cutting-edge industries.