【Weekly Wealth Trends】How to allocate assets based on Trump's policy directions?

Hello, Tigers!

On January 20th, after officially taking office in the White House, Trump quickly issued various policy directives. Domestically, he emphasized deporting immigrants and combating inflation, while internationally, he revived the tariff hammer, imposing tariffs on Canada and China.

Subsequently, on Tuesday evening, January 21st (ET), Trump announced the "Stargate Project," which triggered a rally in concept stocks. By the close:

• ARM surged nearly 16%,

• OpenAI-related concept stock OKLO rose over 9%,

• ORCL gained more than 7%,

• MSFT climbed over 4%.

With one hand swinging tariffs and the other advancing AI infrastructure, Trump is navigating between traditional energy and technology. So, how should investors plan their allocations this week?

Key Factors to Analyze:

1. Impact of Tariffs on the Market

At present, Trump seems relatively cautious with tariffs.

• He has yet to sign any executive orders related to tariffs on his first day.

• Even his most aggressive threats towards China have softened to a mere "investigation," with a potential 10% tariff by February 1st, significantly lower than the previously mentioned 60%.

Wall Street, however, remains concerned about the uncertainty surrounding tariffs. Questions linger: Will Trump's current mild stance be temporary? How will other countries retaliate? These factors will significantly influence investment strategies for the year.

Goldman Sachs estimates only a 25% chance of a blanket tariff on global imports, with targeted tariffs on critical imports being more likely. This approach aims to encourage reshoring production of essential goods to achieve U.S. self-sufficiency.

Overall, the market perceives that Trump is unlikely to implement broad tariffs recklessly. Instead, tariffs may serve as a negotiation tool, reducing their market impact.

2. The "Stargate Project" Sparks Controversy

Fueled by the "Stargate Project," related stocks saw widespread gains. However, the initiative has sparked significant controversy:

• Funding Concerns: The project's estimated cost is $500 billion, but its feasibility and actual funding sources remain unclear. Critics like Gavin Baker have called the figure "absurd," questioning whether major players like SoftBank can commit.

• Mixed Reactions: Elon Musk criticized participating companies for lacking sufficient capital, while Anthropic CEO Dario Amodei labeled the project as "chaotic" with uncertain government involvement.

Tiger Asset Management noted that while companies like OAI and AVGO collaborate on ASIC chips, production timelines are at least 12-18 months away. If the project proceeds immediately, NVIDIA may be the sole viable option.

3. Impact of Japan's Interest Rate Hike

Japan’s central bank is expected to announce an interest rate hike on Friday. According to a Bloomberg survey, over 74% of economists believe a rate hike is imminent, contingent on Trump’s policy announcements not causing significant market turmoil.

Historically, Japanese rate hikes have triggered short-term market turbulence, but recent factors suggest limited impact:

• The hike has been priced in by the market.

• Unlike last year’s unexpected hikes, the current decision aligns with forecasts, reducing the risk of sudden carry trade unwinds.

4. Investment Strategy for the Week

Configuration Logic:

Short-term markets face numerous disruptions, but the long-term tech trend remains intact. A balanced multi-asset allocation is a prudent strategy ahead of U.S. earnings season.

Recent sell-offs following major news events highlight the importance of diversification. While tech stocks remain a long-term growth area, high valuations and heightened expectations could lead to volatility during earnings announcements.

Short-Term Allocation: Focus on defensive assets like gold and financials. Long-Term Allocation: NVIDIA, Google, and other tech giants retain significant potential.

Asset Allocation Recommendations: