A month in which the victory of Donald Trump in the US presidential elections impacted global financial markets has just come to an end. Robust movements were recorded in equities, digital assets, currencies and commodities.

In the United States, indices have once again reached record highs: The S&P 500 topped 6,000 points for the first time, with a monthly advance of 5.73%. The index of small American companies—the Russell 2000—stood out this month, and rallied by 10.84% on the prospect of protectionist policies pushed by Trump, which could particularly benefit domestic market-oriented companies. The technology index—the Nasdaq 100—also displayed a positive trend, with a revaluation of 5.23% during the month of November.

Instead, Europe and Asia experienced widespread pullbacks: The Euro Stoxx 50 and the Nikkei 225 fell by -0.48% and -2.23%, respectively, affected by the uncertainty regarding possible tariffs. The Chinese stock market, particularly vulnerable to protectionist risks, saw the Hang Seng Index plummet by -4.40%.

Macroeconomics and Monetary Policy

After the US election, uncertainty regarding global growth and monetary policy has increased.

If the new US administration implements tariffs on imports, that could affect overall growth with a drop in international trade and greater uncertainty in trade policy.

In the base scenario for 2025, global growth is expected to remain resilient thanks to improved real wage growth, stimulus in China and looser global monetary policy.

However, downward trend risks persist due to the slowdown in the US labour market and the possibility of higher tariffs on imports.

Deflation should continue in developed markets, but if tariffs are implemented, they could lead to a one-time increase in price levels, especially in the US.

Increase in the unemployment rate in the largest economies

Source: Multi Asset Solutions Goldman Sachs, Global Investment Research Goldman Sachs

United States

Macroeconomic and monetary policy uncertainty increased after the US election.

If implemented, the three key policy measures (tax cuts/fiscal stimulus, higher tariffs on imports and less immigration) could show some upside risk to US inflation in 2025.

The implications for the growth prospects remain uncertain, although low oil prices and possible deregulation could be supporting factors.

Recession risk remains above average as the labour market might be reaching a turning point.

The Fed is expected to continue with the rate cut cycle towards 2025, although it could slow down.

Contribution to GDP growth in the USA

Source: Multi Asset Solutions Goldman Sachs, Global Investment Research Goldman Sachs

Europe

The economy has grown in consonance with its potential.

• Growth risks: The economy is growing at a moderate pace, but there is some uneasiness regarding the weakness of the German labour market and uncertainty as far as possible tariffs in the US are concerned.
• Moderate inflation: Although service inflation remains high due to salary recovery, it is expected to continue to tone down in 2025 and to return to target once wage pressures ease.
• Monetary policy of the ECB: The European Central Bank has recently cut interest rates and will probably continue making gradual cuts in 2025, with the possibility of acceleration if the economic situation worsens. If trade uncertainty affects economic activity and the labour market, the ECB could take stronger measures to maintain stability.

PMI Germany

Source: Multi Asset Solutions Goldman Sachs, Global Investment Research Goldman Sachs

China

The exports boost is helping growth in the short term, before uncertainty regarding tariffs in the USA materialises.

The government will continue to apply tax and monetary relief measures during 2025 to support domestic demand and compensate for external shocks, while deflationary pressure persists. Current measures are mainly focused on risk control rather than directly stimulating the economy.

Japan

GDP grew by 2.9% in the second quarter thanks to internal demand, but consumption showed signs of slowing down in the third quarter, in which GDP fell by 0.9%.

• Real wages are expected to improve and consumer confidence to rise, contributing towards spending.
• Though core inflation remains stable, it is expected to gradually rise with the increase in energy costs, imports and wages.
• The Bank of Japan (BoJ) remained inactive during the October meeting. However, it held its position that a further rate hike will occur if the economy develops in line with expectations. Renewed yen weakness and tentative signs of stabilisation in the US labour market build confidence for a rate hike in the coming months.