Market Optimism Soars as Trump’s Policies Take Center Stage
The global economy is abuzz with excitement as investors focus on the potential benefits of President Donald Trump’s policies. Stocks, bonds, and the dollar are all on the rise, with traders betting on a boost to the world’s largest economy.
Small Caps Shine as Protectionist Stance Takes Hold
Small-cap stocks are outperforming, driven by expectations that they will benefit from Trump’s protectionist stance. The big tech group is mixed, with Nvidia Corp. rising and Apple Inc. falling. Meanwhile, space shares are soaring, and electric-vehicle makers like Tesla Inc. are feeling the pinch.
Chinese Stocks Advance as Tariffs Remain Unannounced
US-listed Chinese stocks are on the upswing, as Trump refrains from announcing tariffs on the Asian nation during his first day in office. This move has eased concerns and boosted investor confidence.
Treasury Yields Approach Lowest Levels of the Year
Treasury yields are nearing their lowest levels of the year, unwinding a recent surge driven by inflation concerns. The dollar is gaining against most major currencies, making commodities priced in the currency less appealing.
Expert Insights: Deregulation and Tariffs to Boost Economy
According to Mohit Kumar, chief economist at Jefferies International Ltd., “Risky assets should benefit from deregulation and tariffs emerging as not so bad as feared.” He adds, “For rates, less onerous tariffs and likely lower oil prices should be a positive.”
Survey Reveals Investors Preparing for Equity Laggards to Rally
A survey by Bank of America Corp. suggests that investors are preparing for equity laggards to rally on bets that Trump could take a softer-than-feared stance on global trade. If concerns around Trump’s tariff proposals prove unfounded, investor allocations would remain risk-on, and stock markets that have trailed the powerful rally in the US would play catch up.
Corporate Highlights: Apple Inc. Downgraded, Charles Schwab Corp. Exceeds Estimates
Apple Inc. received a pair of analyst downgrades, citing soft iPhone sales and failed growth catalysts. Charles Schwab Corp. reported results that exceeded Wall Street estimates, driven by record inflows to its retail brokerage. 3M Co. expects profit to grow this year, and D.R. Horton Inc. reported earnings per share that beat the average analyst estimate.
Key Events This Week: US Conference Board Leading Index, Samsung Galaxy “Unpacked 2025” Event
This week, investors will be watching the US Conference Board leading index, the Samsung Galaxy “Unpacked 2025” event, and the Eurozone consumer confidence report, among other key events.
Market Moves: Stocks, Currencies, Bonds, and Commodities
The S&P 500 rose 0.4%, the Nasdaq 100 was little changed, and the Dow Jones Industrial Average climbed 0.7%. The Russell 2000 of small caps gained 1.2%. The Bloomberg Dollar Spot Index rose 0.2%, while the euro and British pound fell. The yield on 10-year Treasuries declined seven basis points to 4.56%. West Texas Intermediate crude fell 2% to $76.29 a barrel, and spot gold rose 1.1% to $2,738.52 an ounce.
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