LIVE MARKETS-Trump one year on: what's next?

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TRUMP ONE YEAR ON: WHAT'S NEXT?

It's been one year since U.S. President Donald Trump's second election victory and, while it's not been smooth sailing, equity markets have fared pretty well.

The S&P 500 .SPX has jumped 13% over the past year, but has underperformed Japan .N225 and China .CSI300, which have risen 27% and 16% respectively.

But what happens next?

According to Barclays, the second year of U.S. election cycles has typically seen higher volatility and lower equity returns.

"Looking at data since 1927, it is pertinent to note that US equities typically struggled the most during the second year of the Presidential term, in the run up to the mid-terms," write Barclays equity strategists.

"In fact, we saw a similar pattern emerge during Trump’s first term."

Back then, trade war rhetoric was again dominating headlines, but the Federal Reserve was in tightening mode, rather than its current easing bias.

Global equities initially declined but recovered, led by U.S. outperformance. The S&P 500 rose about 6% between November 2017 and November 2018.

"So far, global equities have broadly tracked the performance seen during that first term, despite lagging significantly during H1," Barclays adds.

"If history were to repeat itself, higher volatility should be expected as we get closer to the midterms in Nov'26."

(Samuel Indyk)

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