Greg Boland, Chief Strategy Officer for Tiger Brokers, provides his weekly update.
The Trump trade
At the close of US equities trading this morning, many of the Trump trade stocks had begun to give back some of the huge price gains they have made in the past week since Donald Trump became President-Elect.
The crypto and banking sectors jumped, and many believe Trump will ease the regulation for both sectors.
Trump supporter Elon Musk’s Tesla also jumped. Tariffs on Chinese-made EV imports to the US may be hit with tariffs of circa 50% under a Trump administration. Tesla closed 0.5% higher today but has been up as much as 43% in the past week.
Bitcoin ETFs are up more than 17% on average since last week, but all closed slightly lower today. Individual crypto stocks Coinbase and Marathon Digital closed down 11% and 14% respectively. Coinbase had more than doubled in price in the past week before giving back some of the gains today.
Leading banking stocks were also slightly higher today, with Dow components JPMorgan and Goldman Sachs up 9.5% and 15% respectively since last Tuesday.
US earnings
The US earnings season continued this week. The highlight was the New Zealand/US-listed space company Rocket Lab, which rallied 28% today after reporting after the market yesterday. The gain propelled founder Sir Peter Beck into the billionaire club with his 10.5% ownership of the NASDAQ-listed company.
Next week Walmart and Nvidia report after the bell on Tuesday and Wednesday, respectively (US ET). Walmart is up 63% YTD, while Nvidia is up 195% YTD.
Rates and inflation
This morning’s monthly Inflation and Core Inflation numbers were in line with expectations at 0.2% and 0.3%. CPI also met consensus.
As we know, the US Federal Reserve lowered rates by 25 bp at last Friday’s FOMC meeting as expected. The probability of another 25 bp easing in December is now back up to 81% from 59% yesterday on these latest Inflation and CPI numbers.
One of the questions about the Trump presidency is how policies will affect inflation and forward interest rates. Time will tell how this plays out.
About Greg Boland
Greg Boland is the Chief Strategy Officer for Tiger Brokers. His more than 35 years of specialist experience in capital markets includes exchange management, investment advisory management, surveillance and risk and compliance, operations, and governance, and he is an authority in trading systems and methodologies (including online), exchange-traded equities and derivatives, equity options, index futures and options, and financial futures.