The optimistic outlook for the economy of the United States has continued to filter through financial markets, allowing risk assets to extend gains from Wednesday’s session.After Donald Trump was elected as the 47th president of the United States, Bitcoin, US stock indices and the USD surged alongside individual stocks.Below is a snapshot of some of the major movers’ post president Trump’s victory:
Individual stocks (as of 06 November)
Percentage Move
Closing Price
Tesla Inc
14.75%
$288.53
JP Morgan Chase
11.54%
$247.06
Wells Fargo & Co
13.11%
$72.47
Futures markets
S&P 500
2.53%
5,929.04
S&P 500
2.95%
18,983.46
S&P 500
3.57%
43,729.93
S&P 500
5.84%
2,392.92
Cryptocurrency
Bitcoin
9.03%
$75,646.55
Ethereum
12.49%
$2,806.3
Source: Yahoo FinanceOn today’s agenda, interest rate decisions have stolen the spotlight. Earlier today, the Bank of England (BoE) cut interest rates by 25 basis points (0.25%), in line with analyst forecasts. With the recent changes in the UK budget and proposed tariffs expected to be implement by Donald Trump on US trading partners, the central bank warned at the possibility of a slowing pace of rate cuts due to the expectations of additional inflationary pressures. In response, GBP/USD has gained 0.71% (at the time of writing), driving prices to a current daily high of 1.2970. Although the upward move has allowed the British Pound Sterling to erase a portion of yesterday’s losses, the next big event on the economic calendar is the Federal Reserve interest rate decision, due at 19:00 UTC.With S&P 500, Nasdaq (US 100), the Dow Jones and Russel 2000 futures still lingering around their respective all-time highs (some of which were achieved yesterday), Bitcoin has eased back after posting double digit gains post the election results where prices reached a fresh all-time high of $76,509.56 (according to Coinbase). Market SnapshotSource: BloombergAlthough the Federal Reserve is expected to follow the BoE in delivering a 25-basis point rate cut, focus will likely be on the accompanying press conference, for potential signs of rate expectations for the remainder of the year. In light of Trump’s re-election, the policies expected to be implemented by the new president could potentially cause additional inflationary pressures which could alter the Fed’s mandate for the remainder of the year and into 2025. Fed Meeting Probabilities
Source: CME FedWatch ToolWhile markets have been pricing in another 25-basis point rate cut in December and a 100-basis point cut in 2025, any commentary by Fed Chair Jerome Powell indicating a more restrictive approach may induce volatility. If a slower pace of rate cuts is expected, risk assets could suffer a slight pullback while the USD could benefit against its major counterparts.
