A look at the day ahead in U.S. and global markets.
Almost a week on from the U.S. election and investors are wasting no time betting on who they believe will be the biggest winners (and losers of course) of a new Donald Trump administration.
Say no more than the word bitcoin. The cryptocurrency, referred to by some as “digital gold” has surged more than 25% since Trump’s win and stood on the verge of $90,000 on Tuesday.
Its year-to-date gain stands at more than 100%.
At the heart of the latest surge is the perception that a new Trump administration will usher in a more crypto-friendly environment, with investors seeing an end to increased scrutiny under U.S. Securities and Exchange Commission Chair Gary Gensler, whom Trump has said he will replace.
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
Crypto miner Riot Platforms (NASDAQ: RIOT) jumped nearly 17% on Wall Street overnight, pushing higher still in after-hours trade. Fellow miners MARA Holdings (NASDAQ: MARA) and CleanSpark (NASDAQ: CLSK) leaped around 30%.
With the focus on the winners of Trump’s election win last week, Tesla shares also stand out with the automaker up almost 40% in the past week.
As markets assess what’s to come under Trump 2.0, economic data could play second fiddle for now.
Still, the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices, which provides a sense of how credit conditions are faring, should get some attention.
The last survey, released in August, showed U.S. banks reported unchanged demand for commercial and industrial loans in the second quarter, the first time in two years that demand did not weaken.
Any further signs that credit conditions are in relatively strong shape may add to the perception that U.S. interest rates may not need to fall as quickly as anticipated – especially if tax cuts and tariff hikes under a Trump administration fuel inflation.
Markets price in roughly 80 basis points of U.S. rate cuts by end-2025, compared with just over 100 bps a week ago.
No wonder then that the dollar is rising to near four-month peaks against other big currencies, and the euro is languishing at seven-month lows around $1.0617.
The single currency, down almost 3% in the past week, is decidedly in the losers’ camp after the U.S. election.
Capital Economics forecasts the euro to fall to parity against the greenback by the end of 2025, believing that tariffs will be imposed next year and the ECB will ease by more than investors expect.
Key developments that should provide more direction to U.S. markets later on Tuesday:
* German ZEW index
* Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices
* Fed speakers Christopher Waller, Thomas Barkin, Neel Kashkari, and Patrick Harker
(Source: Reuters)
