Legendary investor Drukenmiller: Trump 2.0 ignites the market with "animal spirits"

Legendary investor and founder of Duken Capital Stanley Druckenmiller believes that Donald Trump's return to the White House has once again sparked speculation in the market and optimism within companies. Druckenmiller said on Monday, "I have been in this business for 49 years, and we may be moving from the most business-unfriendly government to the opposite direction. We have had a lot of on-the-ground discussions with CEOs and companies. I think CEOs are relieved and excited. Therefore, we believe the animal spirits are back." The well-known investor is optimistic about the recent economy, but remains cautious about the US stock market due to rising bond yields. He revealed that he holds short positions in US bonds, betting that bond prices will fall and yields will rise. Druckenmiller said, "As for the market, I think the situation is complex. The US economy is strong, and bond yields are rising, which makes it difficult for me to give a definite answer." In November last year, the S&P 500 index surged nearly 6% due to the influence of Trump's victory, bringing the benchmark index's gains to 23.3% in 2024. Trump's promised tax cuts and deregulation significantly boosted risk assets, especially bank and energy stocks, as well as Bitcoin, which hit a new all-time high on Monday. Druckenmiller stated that he will focus on individual stocks rather than worrying about the overall market. He mentioned that he is bullish on companies that leverage artificial intelligence (AI) to reduce costs and increase productivity. After selling stocks in NVIDIA Corporation and Microsoft Corporation, he did not disclose which AI stocks he is betting on. Regarding concerns about Trump's punitive tariffs disrupting market rebound and causing inflation, Druckenmiller believes that the revenue from tariffs can help alleviate America's pressing fiscal issues. Druckenmiller said, "America has fiscal issues and needs revenue. For me, tariffs are just a form of consumption tax, partly paid by foreigners. The current risk is retaliation, but as long as we stay within the 10% range... I think the risk is overstated relative to the return, which is high." Trump's trade memorandum issued on Monday does not impose new tariffs. Reports suggest that the Trump administration has been discussing plans to gradually impose tariffs on trading partners, increasing by approximately 2% to 5% per month.