Look outside the U.S. for the next Trump trade
This combination of elevated valuations, persistent inflation, and rising borrowing costs presents a more challenging backdrop for U.S. equities compared to the conditions during Trump's first term. While optimism surrounding potential policy changes may drive short-term momentum, structural headwinds like higher interest rates and fiscal imbalances could limit upside potential in the longer term.
Additionally, global dynamics have evolved since 2017. The ongoing geopolitical tensions, particularly with China, and the reshaping of supply chains through nearshoring and friendshoring strategies, could introduce both opportunities and risks for U.S. businesses. For example, while protectionist policies might benefit domestic manufacturing, they could also disrupt global trade relations and raise costs for consumers and corporations alike.
Investors must also grapple with uncertainties around the Federal Reserve’s monetary policy trajectory. With inflation still above target, the likelihood of sustained higher interest rates could weigh on equity valuations, especially for growth-oriented sectors that thrived in a low-rate environment. At the same time, a prolonged fiscal deficit may exert pressure on Treasury yields, further complicating the investment landscape.
In this context, the market's optimism may hinge on the pace and scope of proposed reforms. If the administration delivers significant corporate tax cuts or regulatory easing, it could spark a rally, particularly in sectors like energy, financials, and industrials. However, these benefits might be tempered by longer-term concerns about economic stability and debt sustainability.
Source: https://www.theguardian.com/us-news/2024/nov/04/presidential-election-bettingodds-polling https://www.reuters.com/markets/us/look-outside-us-next-trump-trade-
APHIS Authorizes the Importation of Hass Avocados from Guatemala into the United States
The U.S. Department of Agriculture’s APHIS has authorized the importation of fresh Hass avocados from Guatemala, effective November 8, 2024. A risk analysis confirmed the fruit can be safely imported with measures like commercial-only shipments, packinghouse and production site registration, and safeguarding procedures to prevent pests or weeds. APHIS protects U.S. agriculture from invasive threats and ensures safe agricultural trade. Under the Biden-Harris Administration, the USDA focuses on sustainable practices, fairer markets, and equitable access to nutritious food.
Source: https://www.aphis.usda.gov/news/agency-announcements/aphis-authorizes-importationhass-avocados-guatemala-united-
Photo: Reuters
Photo: Reuters
Wall Street stocks end lower after inflation data, tech stocks push Nasdaq down
Wall Street’s main indexes closed lower on Wednesday, led by a slump in technology stocks, as concerns grew over the Federal Reserve’s cautious stance on rate cuts following persistent inflation. October data revealed strong consumer spending and solid economic growth, but inflation progress stalled, raising uncertainty about upcoming Fed decisions.
The S&P 500 dropped 0.38% to 5,998.78, the Nasdaq fell 0.59% to 19,061.78, and the Dow slipped 0.31% to 44,723.23. Weak forecasts from Dell and HP hit the tech sector, which declined 1.2%, with mega caps like Nvidia and Microsoft also retreating. Meanwhile, the Russell 2000 rose slightly, gaining 0.1%.
Investors also weighed President-elect Donald Trump’s tariff threats on imports from Mexico, Canada, and China. Goldman Sachs warned these policies could delay inflation reduction efforts. Despite the economic uncertainties, the S&P 500 is on track for its best month in a year, buoyed by optimism around Trump’s pro-business agenda.
Source:
https://www.reuters.com/markets/us/futures-dip-caution-prevails-ahead-inflation-data2024- 11- 27/
US suspends Mexican cattle imports after New World screwworm case
The United States has temporarily suspended imports of Mexican cattle following the detection of New World screwworm (NWS) in Catazajá, Chiapas, near the Guatemalan border. Mexico’s government stated that the halt only affects cattle exports, with control measures underway to restore trade.
The USDA confirmed that NWS maggots, which feed on the living flesh of warm-blooded animals, were found in a cow during a checkpoint inspection. Infestations, difficult to detect initially, can lead to severe wounds and discomfort.
Efforts are ongoing between U.S., Mexican, and Central American authorities to contain the spread. Livestock producers in affected regions are urged to monitor animals and report any potential cases promptly.
Photo: Reuters
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Wall St set for higher open in shorter Black Friday session
U.S. stocks showed a positive trend for a higher open on Black Friday, supported by expectations of strong holiday shopping. Retailers such as Target, TJX, Walmart, and Nike saw modest premarket gains as the National Retail Federation projected 85.6 million Black Friday shoppers, up from 76 million in 2023. Analysts emphasized the importance of inventory management and trade policy impacts on retail profitability.
Futures for major indexes were up, with Dow E-minis rising 0.19%, S&P 500 E-minis up 0.15%, and Nasdaq 100 E-minis gaining 0.09%. The Russell 2000 index futures climbed 0.7%, benefiting from retreating Treasury yields. Despite Wednesday's losses due to inflation concerns, November marked significant monthly gains, with the S&P 500 tracking its best rise since February and the Russell 2000 hitting a record.
Investor optimism was fueled by expectations of economic growth under President-elect Donald Trump, driven by anticipated tax cuts and deregulation. However, concerns lingered about inflationary pressures and potential disruptions from tariffs. Traders predicted a 25-basis-point Federal Reserve rate cut in December but foresaw pauses in subsequent months.
In other sectors, crypto stocks rose alongside a 2% gain in Bitcoin, now trading near $97,000. Applied Therapeutics, however, plunged 75% after the FDA rejected its drug for a rare disease. Analysts noted that post-Thanksgiving trading volumes were likely to remain thin.
Source:
https://www.reuters.com/markets/us/futures-inch-up-ahead-shortened-black-friday-session-2024-11-29/
Photo: Reuters
