Correction risks are lingering for market despite Trump optimism

Markets can remain irrational longer than you can remain solvent."

In the note, Allen referenced a famous John Maynard Keynes quote

Growth is only at +2.7% over the last four quarters, and expected to continue in the low/mid 2s. That means that US equity valuations are the highest they've been with such a subdued rate of growth,

he wrote

Markets are pretty exposed, even if Trump only follows through on his stated tariff threats,

he wrote

The probability of S & P 500 drawdown has picked up due to higher valuations, less negative inflation momentum and increased (geo)political uncertainty,

Mueller-Glissmann added

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We still expect to see some additional near-term downside for the SPX,

Michael Welch, analyst at Canaccord Genuity, wrote on Tuesday

After a period of post-election ebullience, sentiment has turned sour again, with the Investors Intelligence survey down to 42% bulls and 32% bears. This is what you want to see if you are bullish."

Fidelity's head of global macro Jurrien Timmer notes

At some point, we are quite certain that Trump will start to move on the tariff measures ... It's quite clear what his intent is,

said Khoon Goh, head of Asia research at ANZ

The first few hours of the Trump administration have underscored that the policy environment will be dynamic once again and markets should brace for volatility,

said Charu Chanana, Saxo's chief investment strategist

Investors now face a new reality where sudden policy shifts and increased volatility are the norm,

said Boris Kovacevic, global macro strategist at Convera

Not mentioning tariffs on China is definitely a leg up for sentiment so we saw an initial jump across the board, but that also means that will leave investors in a guessing game. It will remain an overhang,

said Kenny Ng, securities strategist at China Everbright Securities International

Investors have been enthusiastic about the potential loosening of regulations and possible reduction in corporate and business income taxes,

Sam Stovall, the chief market strategist at CFRA Research, told Reuters

The start of a new presidency often brings fresh energy -- and uncertainty -- to the financial markets,

said Saxo Markets chief investment strategist Charu Chanana

Markets are beating to the drum of Donald Trump on the day of his return to the White House,

noted Russ Mould, investment director at AJ Bell

I have a feeling that Trump's going to want a weaker dollar. So if I have to, I'm guessing that the strength we've seen in the dollar's probably reflected most of the strength that we're going to see,

Boockvar said

My thesis was that if Trump is able to bring peace in the Middle East — which seemingly he has already brought here before the inauguration — then the price of oil is going to go up,

Kilburg said

We have to temper expectations that we're not going to see the same parabolic gains in the alpha-producing vehicle it's been for the last couple of years out of COVID,

Kilburg said

I actually think we're going to have a short-term move in the 10-year above 5%. Then there'll be a flush out of repositioning by some of the biggest institutionally positioned Treasury holders, and then it'll kind of settle back in at 4.5%,

Kilburg said

The two-year likely continues to mirror what our interpretation of the Fed monetary policy is going to be, and if they only cut rates one more time, it's probably at the right place,

Hogan said

Gold has been able to rally in the face of a strong dollar and rising real rates, and that's because of the voracious demand from central banks. I don't see that changing because of the new administration,

Boockvar added

The supply and demand for energy product is much more balanced than what has been reflected in the commodity prices,

Hogan said