Wind of Change, the multi-chart topper by German rock bank Scorpions, was released just after the failed coup in 1991 that sped up the end of the Soviet Union. With some 14 million copies sold, the song held the record for a German artist. That year, a gold copy of the record and US$70,000 from the royalties were presented to Soviet charities via then leader Mikhail Gorbachev — blamed by President Vladimir Putin for the empire’s disintegration.
It is interesting why Putin would hold nostalgia for that period. Even though Putin was then an agent for the KGB, the all-powerful and feared Soviet spy agency, he had to supplement his income as a bombila, the nickname for informal cabbies or pirate taxies before it has been formalised under platforms like Uber and Grab.
Also in 1991, the documentary Trump: What’s the Deal was briefly screened in New York. The producers were unable to find a TV station to broadcast this film after LBS Communications, the syndicator, pulled out. It was alleged and subsequently denied by the parties that pressure from Trump kept the film under wraps. In 2015 after Trump announced he was running for the Oval Office, TV stations still would not broadcast the documentary. It was then released online with the tag line, “The new Trump. The old Trump. The same Trump.” The Guardian described it as “a flagrant hit piece documenting Trump’s mafia connections and myriad legal troubles” with “uncomplicated aesthetic ambitions”!
Back then, The Donald was the headline sponsor and judge of Elite’s “Look of the Year” competition in New York, bustling with teenage models vying to be the next Cindy Crawford or Helena Christensen. Trump was also busy testifying at a US House hearing on US economic recovery, giving advice on the country’s economy. Although registered as a Republican in Manhattan in 1987, he changed his party affiliation five times since. As he said in a CNN interview with Wolf Blitzer in 2004: “I probably identify more as a Democrat.”
Trump’s politics and Trump trade has changed
How times have changed a quarter-century on, as Trump 2.0 starts on Jan 20. Given how he claims Putin wants a meeting after the inauguration, there are some who hope he will deliver his promises to bring peace to Ukraine. Meanwhile, as North Koreans continue to die on behalf of Russians in Ukraine, Trump has declared that Greenland, Canada and the Panama Canal should belong to the US, and will not rule out the use of military force.
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Since Nov 7, 2024, when it was clear Kamala Harris was Trumped, US equity investors, Elon Musk legionaries, Silicon Valley VCs and crypto bros have been swaggering to the moon. The ride has been spectacular.
Prior to Nov 7, Tesla was sputtering, suffering from the ignominy of being the sole Magnificent 7 laggard even as others powered ahead on the back of AI-themed run since mid-2023. Each time Musk posted on X and was photographed with his “bro” at Mar-A-Lago, or DOGE announcement, or leaked reports of him joining Trump’s calls with Ukraine’s Vladimir Zelensky, Tesla would roar, doubling in a month to reach US$480 ($658) in mid-December 2024. The run was reminiscent of the two-month rally from US$220 to US$410 in September 2021 after DOGE coins, first issued as a joke, could be accepted as payment for Tesla cars. A subsequent correction, equally spectacular, took it to a bottom at US$110 in January 2023.
I am not saying this will happen again. However, since hitting US$480, and attempting again to US$465 before Christmas, this volatile roller-coaster of a stock has dropped — it started January at US$379 after a public battle between Musk and Trump’s MAGA base over H-1B visas for skilled immigrant labour. “The First Bro” has also waded into European and British politics — supporting the far-right AFD in Germany, and then abandoning Nigel Farage of UK’s Reform UK because he did not want to “bend the knee”. Even so, at current levels, Tesla is still a “modest” 108x earnings. Modest, it seems, for the best pal of the soon-to-be-most-powerful man in the world, say his fans. Fasten your seat belt, is my view, if one were to get involved, especially if it is autonomously driven for now.
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US stock markets have gained around 20% in both 2023 and 2024. But most US investment and private banks are still saying that 2025 will be a good year for US stocks, thanks to the endless potential of AI where “this time is different”. The real reason for such bullish calls, perhaps, is to move more products or to push up valuations so that IPOs and M&As are an easier sell.
Perhaps I am sceptical, but price action on the US markets in January has not been encouraging. Attempts to rally at the start of the new year have been weighed down by stronger-than-expected US employment numbers and the hawkish tone by the Federal Reserves. By the close of the second week of January, the Nasdaq had closed below 19,300 points — below the rally that began after Nov 7 last year.
To put it another way, for all the sound and fury about US tech and AI, the Nasdaq’s six-month return is just above 4%. Likewise, the S&P500 is up just under 3.8% having also pulled back to close that week below the Nov 7 close of 5,973 points. Nvidia, the bellwether AI stock, gained as much as 15% in 2025 but is as at Jan 10 back at US$135 — where it started the year.
In that same 2004 Wolf Blitzer CNN interview where Trump identified more as a Democrat, he said: “It’s interesting, I’ve been around long — you know, I think of myself as a young guy, but I’m not so young anymore. And I’ve been around for a long time. And it just seems that the economy does better under Democrats than the Republicans.”
Ironically, since that interview, the US economy under Barack Obama cleaned up the mess in both Main Street and Wall Street left by George Bush Jr from the Global Financial Crisis. Likewise, Joe Biden’s four years in office has led to historically low unemployment numbers, a stock market at record levels, and the US very much the only world superpower. In contrast, Trump ended his first term in 2020 with a relatively muted report card. Just saying.
The climate has changed
As Corporate America and its shareholders who have cheered it on look forward to less regulation and potentially lower taxes to fuel further stock market gains, another wind of change has already taken place in the US. The world of liberal woke has shifted.
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Nasdaq’s rule to require listed companies to have a LGBTQ+ board member has been struck down by the courts after Trump’s election win. And they are not fighting back. Facebook’s Mark Zuckerberg has bent the knee — as liberals rail — first scrapping its role, albeit small, in policing free speech and leaving it to the community. The CEO of Meta Platforms has also rolled back internal DEI (diversity, equity and inclusion) policies. Apple, under openly gay Tim Cook, has at least for the time being, insisted that it will stay a progressive employer and keep those policies in place.
Corporate America has to choose between being invited to Trump’s inauguration like Zuckerberg, OpenAI’s Sam Altman and Amazon’s Jeff Bezos. If not, they could potentially find themselves left out as Trump and his team change the rules that could have profound outcomes on their businesses.
By the end of last year, US banks including Goldman Sachs, Morgan Stanley, Citigroup and Bank of America had withdrawn from the Net-Zero Banking Alliance, founded to unite banks in aligning lending, investment and capital market activities with zero greenhouse gas emissions by 2050. While the world counts down to Trump’s inauguration, JP Morgan Chase — which held out in 2024 — exited, too, on Jan 8. With the new administration in favour of oil and gas investment and calling climate change a “hoax”, the banks are staying open for business.
Climate change, just like managing the unintended risks of unfettered AI development, requires global collaboration. If the world’s largest economy rolls back environmental, social and governance (ESG) and sustainability commitments and abdicates its leadership, we may have more cool-weather days of 21°C in Singapore like in early January. This unfortunately comes with a lot of rain and some “ponding”, and hopefully sea levels do not rise faster than Singapore’s 100-year plan to address it.
Climate change is already being keenly felt. The extended summers in Tokyo and Seoul, followed by heavy blizzards and storms in North America and Europe, have prompted private insurance companies to warn that the growing catastrophic risks are forcing them to stay away.
More recently, the wildfires in Los Angeles are taking place just months after numerous private insurers dropped existing policies and declined to sign new ones, forcing many homeowners to rely on public insurance which costs more and covers less.
Of the US$50 billion to US$150 billion in economic damage thrown up by early estimates, just a fraction are insured, highlighting massive wealth destruction in the making.
Besides the ongoing drought in LA, the almost perfect fire storm is being fanned by hot 100km/h Santa Ana winds from the Nevada desert, possibly worsened by budget cuts in fire departments. As expected, Trump’s response is to politicise, blaming Democrats who are in charge of California.
The most populous US state, on its own, has a 2023 GDP of nearly US$3.9 trillion, or 14% of the country’s total. Or, to put it another way, California, if on its own, is the fifth largest economy in the world after the US, China, Germany and Japan.
After sensational headlines of celebrities losing their homes and iconic buildings getting destroyed, the real story will be tabulating the costs and impact on the US economy, and if the politics between the new President and the state’s governor will get in the way of recovery. Maybe home builders’ stocks will get a boost, but for sure, taxpayers will ultimately carry some of it and deficits will rise.
Last week, US 10-year yields topped 5% as bond traders and speculators bet on a more hawkish Fed. Like the Santa Ana winds have shown, change is unpredictable and potentially very messy. If an economic hard landing results as markets move too far ahead, interest rates will ultimately fall.
Chew Sutat retired from Singapore Exchange after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange and he was awarded FOW’s Lifetime Achievement Award. He serves as chairman of the Community Chest Singapore
