“I give this relationship no more than six months,” quipped Peter Brown, the Managing Director of Baggot Investment Partners based in Dublin. The man knows a thing or two about market dynamics.
It seems he’s not the only one with these reservations.
With Donald Trump stepping into the presidential limelight just last Monday, financial markets braced themselves for a whirlwind of changes across nearly every conceivable sector—stocks, foreign exchange, and cryptocurrencies all poised for a shakeup.
And then there’s the Musk factor. Ah, Elon Musk—the ambitious tech mogul who seems to have found himself at the center of the political storm, prominently featured during the inauguration, alongside other infamous ‘tech bros.’
Yet, the burning question remains: Is this partnership the dawn of a new economic era for the U.S., or merely a ticking time bomb destined for detonation?
As Brown puts it, “The markets are wagering that these two titans won’t see eye to eye for long. There simply isn’t enough room for both of them to thrive under one roof.”
The narrative is compelling: both Trump and Musk share an audacious vision for streamlining the federal government, eager to dive deep into budget books and operations with a magnifying glass.
Musk, ever the entrepreneur, has made waves by declaring his intention to slash federal spending by $2 trillion. Cutting jobs often brings to mind the image of an overzealous editor wielding a red pen, but Musk has a different kind of axe he’s eager to swing—a no-nonsense approach aimed at ridding the government of what he considers inefficiency. “The challenge with Musk’s plans is painfully clear,” Brown elaborated. “He can’t just wave a magic wand and fire government employees like he does at Tesla. There are laws in place, and he’ll quickly hit a brick wall if Congress doesn’t play ball.”
It’s a sentiment that’s echoed in the whispers of the financial elite. After an exhilarating honeymoon phase, other analysts forecast a split between the presidential duo by 2025.
Enter Canalys, a global US tech market research firm, which suggests that friction may erupt over China. If Trump decides to implement his promise of hefty 60% tariffs on Chinese imports, things could get murky indeed.
Initially, he didn’t push for these tariffs during his early administration days—perhaps a calculated move to soothe market jitters.
Musk, however, relies heavily on China—think of it as the lifeline that keeps Tesla afloat. Between manufacturing and a plethora of essential materials, any disruption could spell trouble for Tesla’s ambitions in self-driving technology. In the last year alone, Tesla shares soared by a staggering 98%, a rocket trajectory largely attributed to the election outcome. The company now flaunts a monumental valuation of $1.24 trillion and Musk has grand aspirations to catapult it to a $4 trillion valuation. But the key? Keeping those ties with China intact.
Musk’s visionary outlook hinges not just on electric vehicles; he’s dreaming about a world dominated by AI and robotics—revolutionizing industries one autonomous vehicle at a time. It’s a high-stakes game of chess, and the regulatory landscape will need to be navigated carefully if Trump plays his cards right.
During his inaugural speech, Trump laid out his ambitious plans to plant an American flag on Mars. Cue the cameras panning over to Musk, whose exuberance was unmistakable as he waved in delight. This isn’t just a fleeting whim; Musk’s aspirations for Mars colonization via SpaceX thrive on the support of a pro-deregulation Trump administration. Together, they could significantly accelerate initiatives under NASA’s Artemis program, which Musk’s company is proud to back.
And then there’s Musk’s enthusiasm for cryptocurrency. In a curious twist, he even dubbed the newly formed Department of Government Efficiency after the beloved dogecoin, adding an unorthodox flair to government naming conventions. Not one to miss a trick, the Trump family also unveiled their own meme coins right before the inauguration.
“My NEW Official Trump Meme is HERE! Let’s celebrate WINNING!” tweeted the then President-elect as he took the social media stage by storm.
Both Trump’s and Melania’s coin ventures have seen their ups and downs but have piqued investor interest nonetheless. Meanwhile, Bitcoin has made headlines with its recent surge, bouncing almost 4% this week alone and briefly flirting with a record high of $109,588 on inauguration day.
Cryptocurrency enthusiasts are banking on Trump to uphold his promises as he steers the White House ship.
“Those first hundred days? They’re make-or-break,” said Lenny McLoughlin, an Investment Strategist at Irish Life Investment Managers. President Trump certainly wasted no time setting a bold tone right from day one.
McLoughlin forecasts that U.S. equity performance could see remarkable growth—he’s eyeing nearly double digits, perhaps a tantalizing 10-12%. But let’s not sugarcoat it; volatility is part and parcel of the journey. “Given Trump’s penchant for chaotic announcements, prepare for more bumps in the road come 2025 than we’ll see this year,” he noted, wisely advising investors to diversify their portfolios.
While it’s still a waiting game to discern what the next four years under Trump’s administration will mean for the markets, one thing is crystal clear: for better or worse, at least one individual is reaping the rewards from this unfolding saga—Elon Musk.
But what happens if this once-celebrated partnership sours? Will Musk still be smiling, or will the political winds shift and toss his fortune off-course? While the markets might quiver, it’s hard to believe Musk’s empire would crumble so easily.
So, has the financial realm calculated the risks of this famously complex bromance? Only time will tell.
Report By Axadle Desktop
