US Stock Futures Rise as Investors Digest Election Results and Upcoming Fed Decision US stock futures are showing gains as investors process the outcome of the recent US presidential election and anticipate a key interest rate decision from the Federal Reserve. Wall Street reached record highs following the victory of Republican candidate Donald Trump, who will return to the White House for a second term after a surprising win over current President Joe Biden.
“Trump Trades” on the Rise In response to the election, “Trump trades” surged. These assets, which have generally followed Trump’s campaign odds, saw gains. The US dollar jumped by the most it has in two years, and Treasury yields rose as investors predicted that a Trump presidency would support stocks, create inflationary pressures, and decelerate future rate cuts. Notably, Bitcoin surged to a new all-time high of $76,134, with optimism around Trump’s pro-cryptocurrency stance.
Federal Reserve’s Interest Rate Decision Looms Following the election, the Fed is scheduled to announce its interest rate decision after a two-day meeting, postponed due to the election. The market largely expects a quarter-point rate cut, lowering the benchmark federal funds rate to a range of 4.75% to 5%. This move follows the Fed’s previous outsized 50-basis-point cut in September. Investors will watch Fed Chair Jerome Powell’s comments for insights on the rate path this year. While additional cuts in December are expected, Trump’s election win has led traders to anticipate only two more cuts in 2025, bringing rates to around 3.75% to 4%.
China’s Trade Balance Surpasses Expectations China’s October trade balance showed a robust surplus of $95.27 billion, exceeding the forecast of $73.5 billion. This improvement was largely due to a surge in exports, which grew by 12.7% year-on-year, surpassing expectations. Imports, however, saw a decline. China’s National People’s Congress is expected to unveil new fiscal stimulus measures to fuel economic growth, which could have significant implications for global markets.
Oil Prices Dip Amid Trump’s Victory and China Stimulus Speculation Oil prices dipped slightly as markets considered the implications of Trump’s victory and anticipated further stimulus measures from China, the world’s top oil importer. Trump’s policies are generally seen as pro-business, likely fostering economic growth and boosting oil demand, while his presidency may pressure oil supply from Iran and Venezuela.
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