Crypto News: Markets Daily: Rethinking Trump trades

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Markets Snapshot

S&P 500 Futures

5,995.25

-0.14%

Bloomberg Dollar Spot Index

1,260.45

+0.03%

WTI Crude Oil Futures

71.29

-1.48%

US 10-Year Treasury Yield

4.304%

-0.021

Market data may be delayed depending on provider agreements.

Federal Reserve Chair Jerome Powell made clear he's ready to defend the central bank from pressure after Donald Trump's re-election. The Fed, as expected, cut interest rates by a quarter point.
US stock futures retreated on Friday morning, tracking steeper losses in Europe. The S&P 500 is up 4.3% so far this week.
China rolled out a $1.4 trillion program to refinance local government debt, another step to support economy. Investors were underwhelmed: China stock-index futures and commodities fell.
US equity funds took in $20 billion on Wednesday, the biggest daily addition in five months, according to Bank of America.
Trump named Susie Wiles, one of the top architects of his campaign, as his White House chief of staff. She will be the first woman holding that role and wield considerable power over operations in the West Wing.

Markets have singularly revolved around Donald Trump's election triumph this week and he will reshape the economic and political landscape.

Stocks and crypto reacted euphorically, with investors betting that the Republican victor will supercharge US economic growth, support American industry and loosen the regulation of digital assets. The S&P 500 is on the verge of closing out its best week in a year and Bitcoin cracked new all-time highs.

The message is more muddled in other markets. The dollar has reversed most of its post-election surge, and is tracking to end the week lower. Ten-year Treasury yields are roughly the same as where they started the week, after a two-day whipsaw.

That sideways action is evidence of the next big debate on Wall Street: Will Trump make his campaign promises come true?

Yes, Trump is expected to push through higher tariffs, lower taxes and looser regulation — all of which could fan inflation by pouring fuel on an already strong economy. But there are also forces in the opposite direction — like whether the Federal Reserve then keeps interest rates higher for longer.

Powell in his press conference yesterday hinted at a willingness to defy any political pressure — responding with a sharp "no" when asked if he would step aside if Trump asked for his resignation.

The other complicating factor is whether rising bond US yields will hurt equity prices, and if an ensuing selloff would lead Trump to moderate his tactics. No president in modern history has so publicly made the rallying stock market such a crucial barometer of his success.

Amundi SA's Vincent Mortier says he's watching the 5% level on the 10-year bond as a alert level for stocks. While some of his firm's funds had positioned themselves to gain from a Trump victory rally, he thinks caution is now more appropriate.

"We will probably take some profit in the coming days," said Mortier, the firm's chief investment officer.

For more, check out this explainer by Bloomberg Opinion's John Authers:

--Lynn Thomasson

Pinterest is slumping 13% in pre-market trading after the pinboard-style platform issued another weak sales forecast for the holiday quarter.

The results show not all social media companies are made equal: In contrast, Meta has been ramping its artificial intelligence integration, and its AI-driven feed and video recommendations have led to an increase in time spent on Facebook and Instagram. —Subrat Patnaik

Nvidia replaces Intel in the Dow Jones Industrial Average today — marking a changing of the guard in Wall Street's oldest and most prestigious of stock benchmarks.

It's a snapshot of the winners and losers of the artificial intelligence race, and how the leaders of one tech era don't necessary equate to the leaders of the next. Nvidia, whose shares have soared more than 200% in the past 12 months, is at the heart of making chips for AI models hungry for computing power. Intel, meanwhile, missed out almost entirely on the AI boom and has been forced to cut jobs. Its shares lost almost a third of their value over the same period.

"The bond market is going to be the arbiter of what policies are going to be acceptable. We have no fiscal space left in the US. The bond market will be the constraint on economic policy coming out of the Trump Administration."

Christopher Brightman

Chief executive officer of Research Affiliates LLC

Watch the full Bloomberg TV interview here.

'Government Sachs' is back as Germany promotes Goldman alumnus
Here's who Trump may tap to drive his economic agenda
Spain's Hurricane Katrina moment saw officials ignoring warnings
Trump's billion-dollar windfall after election is just the start
AstraZeneca's China-fueled plunge may be difficult to shake off

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