07/11/2024 Daily Reports
Here’s a closer look at how markets are navigating the fallout from Trump’s anticipated policies, with volatility, rate cuts, and trade concerns on the horizon:
- Mixed Market Reactions Across Asia — As investors weigh the impact of Trump’s trade and fiscal policies, stocks in Hong Kong and China managed slight gains, while Australia and South Korea faced dips. This reaction reflects both optimism for U.S. growth and caution around global trade stability under Trump’s second term.
- Record-Breaking Gains in U.S. Markets — The S&P 500 soared 2.5%, marking its strongest post-election rally ever, and the Nasdaq spiked 2.7%. Investors are hopeful that Trump’s agenda for tax cuts and deregulation will bolster U.S. corporate profits, but concerns loom around inflation.
- 10-Year Treasury Yields Spike Amid Inflation Fears — Yields climbed 16 basis points on expectations that Trump’s policies—particularly tariffs—could drive up inflation, putting pressure on the Federal Reserve’s rate-cut plans. Could this lead to fewer rate cuts than anticipated?
- China’s Trade Stance Under the Microscope 🇨🇳 — China’s CSI 300 Index saw a volatile session, recovering after a 1% dip, as the yuan weakened against a strengthened dollar. Investors are anxiously awaiting China’s response to potential new tariffs that could impact manufacturing and exports.
- Fed Poised for a Rate Cut — As markets brace for U.S. inflation, the Fed is expected to proceed with a 25-basis-point rate cut on Thursday, with another likely in December. Projections suggest more cuts could follow in 2025, yet a stronger dollar could complicate this path.
Will Trump’s protectionist stance fuel a new era of market tension and inflationary pressure, or could these changes drive new growth in the U.S. economy? How will Asia and Europe respond to the trade shake-up?
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Asian Markets Rise on Stimulus Hopes Amid Trump’s Anticipated Second Term and Expected Fed Rate Cut
Asian stocks climbed, with Chinese equities among the top performers, as investors anticipated further stimulus from Beijing and a potential interest rate cut from the Federal Reserve.
Following Donald Trump’s projected win, which bolstered US stocks, investors expected lower taxes and reduced regulations to support corporate profits.
The S&P 500 surged 2.5%—its best post-election performance—while the Nasdaq gained 2.7%. Treasury yields also spiked, reflecting expectations of inflation under Trump’s fiscal policies.
Chinese policymakers are likely to introduce substantial economic measures to stimulate domestic demand, counteracting the potential effects of Trump’s protectionist stance.
The CSI 300 Index rose as much as 2%, especially in consumer and property stocks.
Meanwhile, Japan’s yen strengthened slightly after its recent decline, while the Bloomberg Dollar Spot Index steadied following an initial surge.
As market focus shifts to the Fed’s decision, the central bank is expected to lower rates by 25 basis points.
Investors are closely watching how Trump’s policy proposals may shape the Fed’s longer-term outlook, particularly given Trump’s support for digital assets, which had spurred a Bitcoin rally.
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