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Trump’s Choice Of Bessent For Treasury May Lead To Continued Strength On Wall Street
US Market
The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to add to the strong gains posted last week.
Stocks may benefit from a positive reaction to news President-elect Donald Trump intends to nominate billionaire hedge fund manager Scott Bessent as Treasury Secretary.
Bessent is seen as supportive of the equity markets and an advocate for deficit reduction. He has also called for Trump’s planned tariff increases to be implemented gradually, which could reduce the impact on inflation.
“Hedge fund manager Scott Bessent is perceived as being a relatively conventional and safe pair of hands candidate,” said AJ Bell investment director Russ Mould. “Importantly, Bessent is seen as being less aggressive on tariffs than some of the rhetoric espoused by Trump on the campaign trail.”
He added, “A fall in bond yields in response to his unveiling suggests some of the concern about a new wave of inflationary pressures from import tariffs has eased and that Bessent might be able to do something to bring the U.S. deficit under control.”
Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of several key economic reports in the coming days.
A report on personal income and spending the month of October is likely to be in the spotlight, as it includes the Federal Reserve’s preferred inflation readings.
Reports on consumer confidence, new home sales and durable goods orders are also likely to attract attention along with the minutes of the Fed’s latest monetary policy meeting.
Extending the upward move seen over the course of Thursday’s session, stocks saw continued strength during trading on Friday. The Dow led the way higher once again, reaching a new record closing high.
The major averages all ended the day in positive territory, with the Dow jumping 426.16 points or 1.0 percent to 44,296.51. The S&P 500 also climbed 20.63 points or 0.4 percent to 5,969.34, while the Nasdaq rose 31.23 points or 0.2 percent to 19,003.65.
With the continued upward move, the major averages posted strong gains for the week, partly offsetting the sharp pullback seen last week.
For the week, the Dow surged by 2.0 percent, while the Nasdaq and the S&P 500 both shot up by 1.7 percent.
Stocks rallied in reaction to President-elect Donald Trump’s decisive victory early this month but gave back ground the following week before rebounding in recent sessions.
The advance by the markets came despite a pullback by shares of Nvidia (NASDAQ:NVDA), as the AI darling tumbled by 3.2 percent.
Nvidia fluctuated before ending Thursday’s session up by 0.5 percent after reporting better than expected third quarter earnings and revenues.
Overall trading appeared somewhat subdued, however, as traders looked ahead to the release of key U.S. economic data next week, including readings on consumer price inflation preferred by the Federal Reserve.
Among individual stocks, shares of Gap (NYSE:GAP) surged after the apparel retailer reported better than expected third quarter earnings and raised its full-year guidance.
Meanwhile, shares of Intuit (NASDAQ:INTU) came under pressure after the financial software company reported better than expected fiscal first quarter results but provided disappointing guidance for the current quarter.
In U.S. economic news, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved less than previously estimated in the month of November.
The University of Michigan said its consumer sentiment index for November was downwardly revised to 71.8 from the preliminary reading of 73.0.
While the downward revision surprised economists, who had expected the reading to be upwardly revised to 73.7, the index is still above the final October reading of 70.5.
Despite the unexpected downward revision, the consumer sentiment index is also still at its highest level since hitting 77.2 in April.
Networking stocks turned in some of the market’s best performances on the day, resulting in a 2.1 percent jump by the NYSE Arca Networking Index.
Considerable strength was also visible among computer hardware stocks, as reflected by the 1.8 percent gain posted by the NYSE Arca Computer Hardware Index. The index reached its best closing level in well over three months.
Housing stocks also showed a significant move to the upside, driving the Philadelphia Housing Sector Index up by 1.6 percent.
Banking, biotechnology and oil service stocks also saw notable strength, while utilities stocks gave back some ground.
U.S. Economic News
The Treasury Department is scheduled to announce the results of this month’s auction of $69 billion worth of two-year notes at 1 pm ET.
Europe
European stocks traded at two-week highs on Monday after Donald Trump nominated Scott Bessent, a billionaire hedge fund manager and an advocate for deficit reduction, to lead the U.S. Treasury Department.
Rate cut hopes also fueled gains after ECB chief economist Phillip Lane said monetary policy should not remain restrictive for too long and that the job is not done yet on inflation.
While the German DAX Index is up by 0.5 percent, the U.K.’s FTSE 100 Index is up by 0.4 percent and the French CAC 40 Index is up by 0.2 percent.
Automakers BMW, Mercedes Benz and Volkswagen are moving higher in the wake of reports that China and the EU are nearing a solution over eliminating tariffs on Chinese electric vehicle (EV) imports into the bloc.
Atos SE shares have skyrocketed. The multinational information technology service and consulting company announced that the French State has made a non-binding proposal to buy 100 percent of the Advanced Computing activities of its BDS division for 500 million euros, based on an enterprise value for a period until May 31, 2025.
Airbus SE, an aeronautics and space company, has risen after it announced the launch of a second tranche of its share buyback program, aiming to repurchase up to 2.12 million shares, between November 25 and January 24, 2025.
Anglo American has also advanced after Peabody Energy won a hotly contested battle to buy the miner’s steelmaking coal mines in Australia for $3.78bn.
Rentokil Initial has also jumped. The commercial pest control services company announced that Paul Edgecliffe-Johnson will join the Board as Chief Financial Officer, with effect from January 1, 2025.
On the other hand, home improvement retailer Kingfisher has shown a substantial move to the downside after lowering its profit outlook.
Italy’s UniCredit has also slumped after launching a €10.1 billion takeover bid for smaller domestic rival Banco BPM.
Commerzbank has also plunged. German Finance Minister Joerg Kukies said on Sunday he did not expect UniCredit to go ahead with plans for a takeover of the German lender due to objections raised by the government in Berlin.
Asia
Most Asian stocks rose on Monday, the dollar dipped and bond yields declined after U.S. President-elect Donald Trump chose wealthy hedge fund manager Scott Bessent to be his Treasury Secretary.
Bessent’s reputation for stability and his past advocacy for gradual economic policies have calmed market nerves.
Oil prices traded lower in Asian trading and gold prices were down nearly 2 percent after reports emerged that Israel and Hezbollah are on the cusp of a ceasefire deal.
China’s Shanghai Composite Index slipped 0.1 percent to 3,263.76 after a choppy session as investors awaited the release of NBS PMI data this week for impacts on business conditions from recent stimulus and tariff worries.
Hong Kong’s Hang Seng Index ended down 0.4 percent at 19,150.99, giving up initial gains. China’s central bank today left the rate on medium-term lending facility unchanged after cutting the rate in September.
Japanese stocks posted strong gains on optimism around the U.S. economy. The Nikkei 225 Index jumped 1.3 percent to 38,780.14 ahead of November inflation numbers from the capital city of Tokyo, due to be released later in the week.
The broader Topix Index settled 0.7 percent higher at 2,715.60, with tech giants SoftBank Group and Tokyo Electron surging 3.4 percent and 4 percent, respectively. Uniqlo owner Fast Retailing spiked 3.5 percent.
Seoul stocks ended sharply higher ahead of the Bank of Korea’s interest-rate decision on Wednesday. The Kospi rallied 1.3 percent to 2,534.34, led by tech and battery stocks. Samsung Electronics jumped 3.4 percent and LG Energy Solutions added 3.6 percent.
Australian markets eked out modest gains as falling yields boosted property, technology and consumer stocks. The benchmark S&P/ASX 200 Index rose 0.3 percent to 8,417.60 ahead of inflation readings for October scheduled to be released on Wednesday. The broader All Ordinaries Index ended up 0.3 percent at 8,661.20.
SG Fleet Group shares soared 18.4 percent after the vehicle fleet management and leasing group confirmed that it is in discussions regarding a A$1.2 billion ($785 million) buyout offer from private equity group Pacific Equity Partners.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 1.2 percent to 13,196.08 ahead of the Reserve Bank of New Zealand’s interest-rate decision on Wednesday, with a 50 basis point rate cut fully priced in by markets.
Commodities
Crude oil futures are slipping $0.16 to $71.08 a barrel after jumping $1.14 to $71.24 a barrel last Friday. Meanwhile, after surging $37.30 to $2,712.20 an ounce in the previous session, gold futures are tumbling $23.70 to $2,688.50 an ounce.
On the currency front, the U.S. dollar is trading at 153.91 yen versus the 154.78 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0518 compared to last Friday’s $1.0418.
