Market Momentum Slows as Investors Reassess
The US stock market struggled to maintain its record-breaking pace on Friday, as the initial enthusiasm surrounding President-elect Donald Trump’s victory began to wane. The Nasdaq composite index slipped, while the S&P 500 and Dow Jones Industrial Average futures hovered around the flat line.
China’s Stimulus Plan Falls Flat
Disappointment over China’s latest fiscal stimulus package, aimed at refinancing local government debt, weighed heavily on market sentiment. The $1.4 trillion plan failed to impress investors, who remain skeptical about its ability to revitalize the country’s slowing economy. As a result, oil prices, the yuan, and local stocks all came under pressure.
Doubts Over Trump’s Policies Grow
The “Trump trade” rally, which propelled stocks to record highs earlier in the week, appears to be losing steam. Investors are increasingly uncertain about the president-elect’s ability to implement his ambitious policies, particularly with regards to tariffs. This uncertainty has led to a decline in the dollar and Treasury yields, erasing many of their post-election gains.
Corporate Earnings Take Center Stage
On the corporate front, Sony shares surged in premarket trading after the company reported a 73% jump in quarterly profit. Meanwhile, Nissan’s stock plummeted as investors digested the automaker’s plans to cut 9,000 jobs. Earnings from Paramount are also expected to be released on Friday, with investors eagerly awaiting the results.
Key Market Themes
As we head into the weekend, several key market themes are emerging. China’s stimulus package has fallen short of expectations, while Paramount’s earnings have missed the mark despite growth in its streaming business. Nvidia, meanwhile, has reached a record market capitalization of $3.6 trillion.
Economic Data and Earnings
Today’s economic data includes the University of Michigan consumer sentiment index, while earnings are expected from Canopy Growth, Icahn Enterprises, Sony, and Paramount Global.
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Nvidia has set a new record with a market value of $3.6 trillion, following Trump’s election victory. Paramount’s revenue fell short of expectations, despite a boost in profit from its streaming business. Investors have begun to dial back their “Trump trades” as questions persist over the president-elect’s policy plans.
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