November brought stark winners and losers in the wake of Donald Trump’s U.S. election victory on Nov. 5. The so-called "Trump trades" punished assets sensitive to tariffs, including European exporters and Mexico’s peso, while funneling investments toward U.S. stocks and the dollar. Wall Street experienced a notable rally, with the dollar gaining 2% against major currencies and bitcoin surging by 37%.

However, December could bring volatility. The Trump trade faces risks from potential bond market backlash against increased fiscal spending, along with inflationary pressures and disrupted supply chains due to tariffs. Elevated U.S. equity valuations reflect a level of market complacency, with the challenges of this environment not fully priced in, according to BCA Research.

The euro had its worst monthly drop since early 2022, declining nearly 3% to $1.05, influenced by tariff concerns, political instability in Germany and France, and an economic slowdown in the region. Mexico’s peso and the offshore yuan also fell, while analysts debated whether Trump’s victory signaled a structural shift in the global economy or a reactionary market panic.

Bitcoin emerged as the standout asset, surging 37% in November and approaching the $100,000 milestone, driven by optimism about a crypto-friendly regulatory environment under Trump. While this performance underscores bitcoin’s growing appeal, some analysts caution that speculative excess could lead to sharp corrections.

In the tech sector, Wall Street’s Nasdaq 100 saw its best monthly performance since June, with Tesla jumping 33% and Nvidia benefiting from AI enthusiasm. However, Trump’s tariff plans threaten supply chains, and concerns about an AI investment bubble loom. European banks struggled, with shares dropping 5% amid economic challenges, while U.S. banking stocks soared on deregulation hopes.

November also marked a divergence in bond markets. U.S. Treasury yields pointed higher on inflation expectations, while German yields fell due to economic weakness and geopolitical tensions. Japanese yields rose sharply, reflecting speculation about a rate hike following a yen slide.

As December unfolds, markets remain on edge, navigating the complex dynamics introduced by Trump’s economic policies.