Stanley Druckenmiller believes that "animal spirits" have returned to markets due to Trump, with CEOs feeling "giddy."

Stanley Druckenmiller, a billionaire investor, believes that the re-election of Donald Trump has sparked renewed speculative enthusiasm in the markets and increased optimism among businesses.

"Druckenmillar stated on CNBC Monday that he has been involved in this for 49 years and believes that the administration is moving from being the most anti-business to the opposite. He added that CEOs are somewhere between relieved and giddy, and they believe in animal spirits."

The investor who runs Duquesne Family Office is optimistic about the economy in the short term but is hesitant about the stock market due to high bond yields. He has kept his short position against Treasurys, indicating that he believes bond prices will decline and yields will increase.

"Druckenmiller stated that the markets are complex because of the conflict between a strong economy and rising bond yields resulting from it, which leaves him uncertain about his stance."

In November, the benchmark surged nearly 6%, bringing its 2024 gains to 23.3%, due to Trump's victory. Trump's promised tax cuts and deregulation have boosted risk assets dramatically, especially bank and energy stocks, as well as bitcoin, which just hit another record high Monday.

Bill Druckenmiller, 71, stated that he will concentrate on individual stocks rather than worrying about the broader market. The investor expressed his optimism about companies that will benefit from artificial intelligence in terms of cost reduction and productivity. Although he did not disclose which specific AI stocks he is investing in, he previously sold off Nvidia and Microsoft.

'Risks are overblown'

Druckenmiller believes that the revenue generated by Trump's punitive tariffs could lessen the pressing fiscal problem in the country, despite concerns that it would spoil the market rally and spike inflation.

"Druckenmiller stated that we have a fiscal problem and require revenues. In his opinion, tariffs are a consumption tax paid by foreigners for some of it. Although there is a risk of retaliation, as long as we remain within the 10% range, he believes the risks are exaggerated compared to the benefits, which are significant."

Trump's trade memorandum, which will be released on Monday, will not impose tariffs immediately. Instead, his camp has been reportedly discussing a plan to gradually increase tariffs by about 2% to 5% each month on trading partners.

George Soros' Quantum Fund was once managed by Druckenmiller, who gained fame after making a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.