Stocks, US Dollar and Bitcoin surge on Trump win

Macroeconomic/ geopolitical developments

• In the wake of Trump’s re-election and a Republican-controlled Senate, U.S. stocks hit record highs, Treasury yields fluctuated, the US dollar surged to its highest since July, and Bitcoin reached an all-time high near $76,000, driven by expectations of pro-growth policies, looser regulations, and a favourable crypto stance.

• Donald Trump has secured a second term with 312 electoral votes, flipping all seven swing states, while Republicans have taken the Senate and are close to winning a House majority, setting the stage for a conservative agenda amid a leadership reshuffle.
• The Federal Reserve reduced its benchmark rate by 0.25% to a range of 4.5% to 4.75% on November 7, citing easing inflation and a softening labour market, while Chair Powell signalled potential for further cuts if economic conditions required it.

• With the October CPI report set for release on Wednesday, investors are closely watching for signs of inflation that could influence Federal Reserve rate cut bets post-election, as economists expect a slight uptick in both headline and core CPI rates, potentially impacting market sentiment and Treasury yields.

Global financial market developments

• US and global equity averages extended significantly higher, with US averages at record levels
• US and European bond were higher on the week
• The US Dollar Index was notably stronger.
• Gold futures sold off  from a record high in late October.
• Oil futures rallied and sold off and stayed in wider consolidation mode.

Key this week

Central Bank Watch: There is no central bank activity of note this week, with the focus back on Fed speakers after the recent blackout period before the FOMC Meeting last week, with the standout on Thursday as Powell speaks.

Macro Data Watch: The main focus will be on US CPI Wednesday, plus Retail Sales Friday. Outside of the US, we will watch for the UK Employment report Tuesday, EU GDP on Wednesday, and UK Manufacturing/ Industrial Production and GDP Friday.

Earnings Watch: The US Q3 earnings season is slowing down with Home Depot, AstraZeneca, Cisco and Walt Disney being the main earning releases of this week.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued