2024 US Economy and Trump Policies: Analysis of Inflation, Interest Rates, and Investment Ideas

1. US Price Increase and the Situation of the Working Class Economy

US prices have risen to a level where it is difficult for the working class to lead a normal life.
Daily necessities, rent, and dining out expenses have increased significantly, with even the middle class and above feeling a significant burden from rising prices.
In major US cities, even an annual income of 100 million won (approximately $75,000 USD) is barely enough to make ends meet.

2. Economic Policy Direction of Trump and Treasury Secretary Bessen

2.1. Price Stabilization Policy

Trump has emphasized illegal immigration and price stability as major campaign promises since his time in office.
Plans to use energy price adjustments as a key strategy to curb inflation.
Aiming to lower oil prices and stabilize the economy through increased production of energy resources such as oil, gas, and coal.

2.2. Treasury Bond Issuance and Interest Rate Policy

Moving to adjust interest rates by reducing US Treasury bond issuance and promoting Treasury bond purchases.
Promoting deregulation to allow major US financial institutions to buy more Treasury bonds.
Implementing policies to pressure Japan and China to purchase US Treasury bonds in parallel.

2.3. Tariff Policy and Trade Strategy

Trump's tariff policy has three objectives: negotiation, manufacturing promotion, and securing government revenue.
Trade tariffs with Mexico and Canada are used for negotiation purposes.
Strengthening the strategy to secure favorable conditions through trade hegemony competition with China.

3. US Economic Changes and Investment Strategies

3.1. Inflation and Expected Interest Rate Fluctuations

While aiming to lower oil prices to reduce inflationary pressures, overall inflation is unlikely to stabilize easily.
Labor costs and manufactured goods prices do not fall easily, but price adjustments are possible in the energy and service sectors.
There are limitations to interest rate adjustments, and they are likely to remain at a high level.

3.2. Trump's Manufacturing Promotion and Investment Opportunities

The United States plans to strategically foster the shipbuilding and pharmaceutical industries.
Promoting the activation of US-centered industries while checking China in future industries such as semiconductors, AI, and automation.

4. Impact on Korean and Global Markets

4.1. Market Outlook for the First and Second Half of the Year

Opportunities exist for emerging markets and the Korean market in the first half of the year, before US-centered tariff policies are fully implemented.
Emerging markets are likely to face difficulties again in the second half of the year due to US-centered policies and a global economic slowdown.
Investment strategies need to shift to focus on the Korean and emerging markets in the first half of the year and the US market in the second half.

4.2. AI and Advanced Technology Investment Opportunities

AI, robots, and semiconductors are important investment targets in line with trend changes.
The expansion of US AI investment and intensifying competition with China will increase volatility in related stocks.

5. Investment Ideas: Where to Invest?

Beneficiary industries considering falling oil prices: Transportation, aviation, and logistics-related companies.
Related to the US manufacturing growth policy: Shipbuilding, pharmaceuticals, and AI-based technology companies.
AI, electric vehicle, and autonomous driving beneficiary industries: Semiconductor, battery, and robot automation industries.
Consider US Treasury bond investment: Investment opportunities in Treasury bonds and financial products due to interest rate fluctuations.

< Summary >

US prices have risen sharply enough to burden the working class.
Trump's core policies are blocking illegal immigration and stabilizing prices, with energy price adjustments being a major strategy.
Plans to impact the US economy through tariff policies and Treasury bond adjustments.
Investment opportunities exist in the transportation, AI, shipbuilding, and pharmaceutical sectors, considering falling prices.
Emerging markets and the Korean market are likely to be favorable in the first half of the year, with a shift to the US in the second half.

[More…]

US Economic Outlook 2024: https://nextgeninsight.net/?s=%EB%AF%B8%EA%B5%AD%EA%B2%BD%EC%A0%9C
Trump Policy Analysis: https://nextgeninsight.net/?s=%ED%8A%B8%EB%9F%BC%ED%94%84

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Global Market Outlook and Investment Strategies

US Stock Market Analysis

The US stock market recently underwent a correction but showed stability with a sharp rebound on Monday.
Employment indicators were released stronger than expected, with the unemployment rate falling and the labor force participation rate increasing.
Although the market is shaken by tariff increase issues and inflation concerns, improved earnings are having a positive impact.

Impact of the Labor Market and Inflation

Non-farm employment figures were lower than expected, but the unemployment rate fell to 4.0%, confirming the stability of the labor market.
The increase in the labor force participation rate (62.6%) reflects the health of the employment market.
The wage growth rate (0.5%) could stimulate inflation, and concerns about this persist.

AI and Productivity Improvement

Productivity is increasing due to the introduction of AI technology, with efficiency rising without increased working hours.
Companies utilizing AI have high revenue growth rates, allowing for wage increases without significant burden.
Manufacturing productivity is increasing by 2.3% annually, realizing the economic effects of AI.

US Economic Outlook

The GDP forecast for 2025 is 2.9~3.1%, indicating strong growth.
The probability of a recession (according to Goldman Sachs) has decreased to 15%.
Corporate earnings are being released stronger than expected, suggesting the market is likely to move in a positive direction.

Global Economy and China Market Trends

China's PPI is showing stability with a slight increase.
Increased travel and consumer spending suggest the Chinese economy may rebound in the short term.
However, Chinese companies' ROE is declining in the long term, requiring a cautious approach to medium- to long-term investments.

Stock Investment Strategy

Maintaining a 75% allocation to the US market is stable.
Need to expand investment in AI and Big Tech companies: Nvidia, Oracle, Broadcom, etc.
ETF fund flows are still mainly focused on technology stocks.

Gold and Cryptocurrency Investment

Gold prices are showing a stable upward trend due to continued purchases by central banks.
Cryptocurrencies are also expected to receive steady attention with the spread of AI and the digital economy.

The US stock market is showing a stable trend, repeating corrections and rebounds.
The labor market is strong, and productivity is improving thanks to AI technology, contributing to economic growth.
The US GDP growth forecast is good, and corporate earnings are stronger than expected.
The Chinese economy may rebound in the short term, but a cautious approach is still needed in the long term.
It is advantageous to construct a stock portfolio centered on AI and Big Tech companies.
Gold and cryptocurrencies are also investment targets to continue paying attention to.

[More…]

1. Establishing Global Investment Strategies
👉 https://nextgeninsight.net/?s=%ED%88%AC%EC%9E%90

2. AI Technology and Economic Growth Prospects
👉 https://nextgeninsight.net/?s=AI

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Tesla Stock Decline and the Importance of Long-Term Investing

Recent Tesla Stock Fluctuations

Tesla's stock price has fallen to $350.73 after reaching $488.54 during the day on December 18, 2024, a drop of over 28% from its short-term high. This sharp decline can instill fear in investors, leading to the spread of various negative news and rumors.

Common Reactions to Stock Price Declines

Many investors feel anxious when comparing the short-term high to the current stock price. In particular, they often sell or change their investment strategies, thinking "this time is different." However, understanding how returns change with long-term investing can help one avoid being swayed by these short-term fluctuations.

The Relationship Between Long-Term Investing and Returns

Looking at Tesla's investment returns, there is a tendency for returns to increase as the investment period lengthens.

The return on a 2-year investment is higher than that of a 1-year investment.
Returns increase further over 3, 5, and 10 years.
Those who invested for more than 10 years have recorded incomparably high returns.

In other words, even if stock price fluctuations are large, returns tend to increase in the long term over time.

Difficulties and Pains of Long-Term Investing

Everyone knows that long-term investing is the answer, but it is difficult to put into practice. This is because there are the following difficulties in the investment process:

In the past, Tesla's stock price often fell after reaching its 1-year high.
In some periods, it remained lower than its high for more than 600 days.
However, in the long term, the stock price eventually rose more than 100 times.

In other words, it is important to understand that Tesla's stock price fluctuations have occurred in the past and are not a new pattern.

S&P500 and Long-Term Investing

Not only Tesla but also SPY, an ETF that tracks the S&P500, shows a certain pattern.

The longer you invest, such as 1 year, 3 years, 5 years, and 10 years, the higher the return.
Even including downturns such as the dot-com bubble collapse in the 2000s and the 2008 financial crisis, the market eventually recovered from a long-term perspective.
Since 2009, the returns of those who invested at the low point for 10 years have increased dramatically.

This confirms once again that the stock market always tends to move upward, and the moment it goes down is the best buying opportunity.

The Essence of Long-Term Investing

Short-term market corrections are inevitable.
However, as time goes on, long-term investors have more opportunities to overcome these fluctuations.
Not only Tesla but also investments in representative indices such as the S&P500 show the same pattern.
Ultimately, long-term investing is the process of steadily increasing assets while enduring market volatility.

Conclusion

Tesla's short-term stock price adjustments have occurred frequently in the past, and this is a normal process in the long run. You should continue to invest from a long-term perspective without being shaken by short-term declines. It is necessary to see it as an opportunity rather than a loss.

< Summary >

Tesla's stock price has fallen 28% from its short-term high, but this is a pattern that has been repeated in the past.
Returns tend to increase as you invest for longer periods, such as 5 years or 10 years.
Not only Tesla but also the S&P500 ETF shows an upward trend in the long term.
It is important to maintain a long-term investment perspective without being shaken by short-term volatility.
Stock price declines can be a buying opportunity, so you should approach it strategically.