TechFlow reported on December 25 that, according to Jinshi News, numerous market indicators suggest Donald Trump will face the most highly valued U.S. stock market in history upon entering his new term. Data shows household allocation to equities in the United States has risen from 48.3% at the beginning of 2024 to 51.8%. This metric has demonstrated the strongest four-year return predictability since 1952, and the current level implies a real annualized return for U.S. stocks of -1.5% between 2025 and 2029.
Although during Trump's previous inauguration in 2020—when household equity allocation hit a record high—the S&P 500 still achieved a 9.3% inflation-adjusted annualized return (exceeding the 7.2% average since 1952)—the current market environment has changed significantly. Multiple valuation metrics are now positioned above the 90th percentile relative to their historical distributions since 1950, 1970, and 2000, with some even reaching extreme levels at the 100th percentile. This suggests that U.S. stock returns over the next four years may barely keep pace with inflation, posing a major challenge to Trump’s traditional reliance on strong stock market performance as a measure of political success.
