Market Musings 221124: US retail euphoria
Podcast this week:
Trump Trade 2.0 starts to fade
The "Trump trade 2.0" has led to a stronger US dollar, higher bond yields, a sell-off in gold, and higher US stocks, particularly benefiting US small cap stocks. The main drivers are expectations of lower corporate taxes, deregulation, and higher tariffs on imports, especially from China and Europe. There is uncertainty about the actual impact of these policies, as Trump will not take office until 20 January 2025, and the current Biden administration remains in power until then. Investment opportunities may lie in US agency bonds, short-term investment-grade corporate bonds, and gold, with a 12-month target of $3,000 an ounce.
Summary:
US stocks higher, other markets struggle to followPost-election winners start to stutter: bond yields, small-capsBut others continue to surge; US dollar, bitcoinBoosted by massive inflows into US stocks, ETFsFavoured US sectors: Financials inc. Insurance, Financial services, IndustrialsTech, Semis lag leading sectorsGold starts to recover from post-election sell-offAustralia, Canada leads world ex USAgricultural commodities hit 10-yea highChart of the week: Europe Financial Services
1. Post-election euphoria continues in US stocks, but World ex US struggles to...