- Stocks, Bonds Rise as Traders Embrace Bessent: Markets Wrap
Equities and Treasuries advanced, with traders welcoming Donald Trump’s pick of Scott Bessent for Treasury
Secretary as a measured choice that would inject more stability into the US economy and financial markets. A
gauge of Asian stocks rose about 1%, led by gains in Japan, South Korea and Australia. US futures also edged
higher. Meanwhile, the yield on 10-year Treasuries dropped five basis points to 4.35%. The dollar declined
while Bitcoin rebounded from a weekend drop. Bessent, who runs macro hedge fund Key Square Group, has
indicated he’ll back Trump’s tariff and tax cut plans but investors expect him to prioritize economic and
market stability over scoring political points. The nomination has eased concerns over the incoming
president’s protectionist policies, which had threatened to stoke inflation, worsen trade tensions and amplify
market volatility. - Dow rises more than 400 points for record close, Wall Street posts weekly gain
The Dow Jones Industrial Average closed at a new record on Friday, capping off a winning week for stocks.
The blue-chip Dow gained 426.16 points, or 0.97%, to 44,296.51, a new all-time closing high and its third
straight positive session. The S&P 500 added 0.35% to finish at 5,969.34 for its fifth winning day in a row.
The technology-heavy Nasdaq Composite rose 0.16% to 19,003.65. Gains were restricted by slides of 3.2%
and 1.7% in Nvidia and Alphabet, respectively. The Dow ended the week about 2% higher, while the S&P 500
and Nasdaq each added about 1.7%. That marks a turn from last week, when Wall Street’s postelection rally
stalled. - Oil gains more than 5% for the week as Ukraine war intensifies
Oil prices rose on Friday, posting a weekly gain of more than 5%, as the Ukraine war intensified and Chinese
imports were set to increase in November. Brent crude futures climbed 94 cents, or 1.27%, to close at $75.17
a barrel. West Texas Intermediate crude futures rose $1.14, or 1.63%, to settle at $71.24 per barrel. Brent
gained nearly 6% while U.S. crude finished 6.3% higher this week, as Moscow steps up its Ukraine offensive
after Britain and the United States allowed Kyiv to strike Russia with their weapons. Putin said on Thursday
Russia had fired a ballistic missile at Ukraine and warned of a global conflict, raising the risk of oil supply
disruption by one of the world’s largest producers. Ukraine has used drones to target Russian oil
infrastructure, for instance in June, when it used long-range attack drones to strike four Russian refineries. - Gold rallies on safe-haven demand, set for best week in nearly 2 years
Gold prices breached the $2,700 threshold for the first time in over two weeks on Friday, on track for their
biggest weekly gain in nearly two years, as safe-haven demand outweighed dollar strength and lower
expectations of a U.S. rate cut next month. Spot gold surged 1.5% at $2,709.24 per ounce, marking its highest
since Nov.6. U.S. gold futures settled 1.4% higher at $2,712.20. - Japan’s inflation holds above BOJ target, fanning Dec rate hike bets
Japan’s core inflation in October held above the central bank’s 2% target and a key index stripping away the
effect of fuel accelerated, data showed on Friday, keeping pressure on the central bank to raise its still-low
interest rates. The data also showed continued gains in service prices, which are closely watched by the Bank
of Japan (BOJ) for clues on whether firms were passing on rising labour costs, suggesting conditions for
further rate hikes were falling into place. The readings will be among factors the BOJ will discuss at its next
policy meeting on Dec. 18-19, when some analysts expect a hike in short-term rates to 0.5% from 0.25% as
the central bank unwinds years of ultra-low rates. The yen’s renewed weakness, which heightens inflationary
pressure by pushing up the cost of imports, has also led some market players to bet on a December rate hike. - Chinese Exports to Hit Record This Year Before Second Trump Term
Economists expect Chinese exports to reach a historical high this year as customers rush to front-load orders
given President-elect Donald Trump’s threat of higher tariffs when he takes office in January. Export growth
will accelerate to 7 per cent in the final three months from the same period last year, according to the
median forecast of analysts surveyed by Bloomberg Nov. 15-21. That’s an upgrade from the 5 per cent gain
seen in October ahead of the US election and would push total exports this year to $3.548 trillion, above the
previous record in 2022. - Stubborn US Inflation Set to Reinforce Fed’s Go-Slow Approach
US inflation figures in the coming week that are seen showing stubborn price pressures will reinforce the
Federal Reserve’s cautionary posture toward future interest-rate cuts. The personal consumption
expenditures price index excluding food and energy, the Fed’s preferred measure of underlying inflation, is
projected to have risen by 0.3% in October from September, and by 2.8% from a year earlier, in what would
be the largest advance since April. The report is also expected to reveal resilient household spending and
steady income growth at the start of the fourth quarter. Consumer outlays, unadjusted for price changes, are
forecast to climb 0.4% after a 0.5% advance the previous month. Personal income is seen rising 0.3% for a
second month, buoyed by healthy yet moderating job growth. - UK’s Starmer Pledges ‘Radical’ Overhaul of Social Spending
Keir Starmer said his Labour government would be setting out radical reforms in the coming week to tackle
the UK’s rising outlays on benefits. Make no mistake, we will get to grips with the bulging benefits bill
blighting our society, the prime minister said in an op-ed in the Mail on Sunday newspaper. Starmer’s Labour
is under pressure to balance the country’s spending and boost growth after returning from over a decade out
of power. The first set of indicators following its inaugural budget saw private enterprise stagnate and
consumer retail spending fall. The number of working age people who claim health-related benefits or who
are not working due to long term sickness has soared in the UK since around the start of the Covid-19
pandemic. - China’s central bank keeps medium-term loan rate unchanged amid yuan weakness
The yuan has come under pressure following Donald Trump’s victory in the U.S. presidential election. Wang
Tao, chief China economist at UBS Investment Bank, estimates the MLF to remain at 2.0% this year before
coming down to 1.2% at the end of 2025, and 1.0% in 2026. Zhiwei Zhang, president and chief economist at
Pinpoint Asset Management, expects the PBOC to hold off from cutting rates until the new U.S.
administration takes office in January. - Bitcoin rose on Friday and was within spitting distance of the coveted $100,000 level as optimism over
friendlier U.S. regulations and increased interest from options trading boosted the crypto
The world’s largest cryptocurrency hit a series of record highs this week, with a rally after Donald Trump’s
election win showing few signs of easing. Bitcoin rose 1.9% to $98,870.4 by 01:17 ET (06:17 GMT). The coin
hit a record high of 99,289.3 earlier in the session, and was up 9.1% this week. Bitcoin trading was also
boosted by the launch of options tracking Blackrock’s iShares Bitcoin Trust (NASDAQ:IBIT) exchange-traded
fund, with traders seen piling into call options on the crypto. - The world’s auto giants will need to partner with Chinese companies to survive in China, analysts say
Time is running out for traditional foreign automakers to adapt to China’s electric car market, signaling to
industry analysts that companies must double down on local partnerships to survive. U.S. automaker General
Motors, Germany’s Volkswagen and Japan’s Nissan each saw their China revenue drop between 2019 and
2023, according to CNBC’s calculations of company data. Western [automakers] are waking up to the fact
that they can’t just sit here and watch their market positions just erode and erode, said David Norman, a
Hong Kong-based mergers and acquisitions lawyer at A&O Sherman. - Spanish biggest banks including Santander, BBVA and CaixaBank, will be the most hit by a change in the
tax regime applied to their revenue the country’s Congress approved Thursday
Analysts note the tax isn’t good news but doesn’t look too harsh for the lenders and the impact should be
limited. KBW estimates Banco Santander and BBVA face a 1% hit to their profits, while Unicaja will be the
bank that benefits the most. Banco Santander shares declined 1.8% in Madrid trading, the worst bank in
Europe Friday, while BBVA also edged lower. Unicaja Banco rises 3%. Deutsche Bank: Analyst Alfredo Alonso
writes that “maintaining a tax which is now difficult to link to windfall benefits generates uncertainty for
shareholders, contributing to a certain degree of stigmatization toward Spanish banks, especially the
domestic ones”; Final impact should not be overly harsh compared to the previously three years and in
general, “while keeping the tax is not good news, it is at least no worse than what they have previously
endured”; He calculates that CaixaBank will add about €80m in cost compared to the previous version of the
law, Santander €70m, BBVA €40m; while Sabadell and Bankinter will pay €40m less.
KBW: Analyst Hugo Cruz expected the levy to be extended but not changes to its mechanism; says pending
final details it appears the tax will change from a flat rate of 4.8% of Spanish NII and fees to a progressive rate
from 1% to 7%, and the resulting figure will then be reduced by 25% for tax reasons; Estimates that the new
levy could have a negative impact on adjusted earnings in 2025 of ~2% for CaixaBank, ~1% for Santander and
BBVA and a positive impact of ~8% for Unicaja, and ~2% for Sabadell, Bankinter. - Moderna Inc. shares rise as much as 10%, most intraday since May 22, after company management said
Robert F. Kennedy’s nomination to the Department of Health and Human Services is unlikely to mean the
removal of vaccines at a Jefferies fireside chat
Jefferies analyst Michael Yee says Moderna believes RFK may have caused investor nervousness but unlikely
doing anything draconian or removing vaccines. Notes while some investors see the market nearing short
term ‘peak RFK negativity’, investors remain nervous around structural issues and profitability at Moderna.
Maintains hold rating, PT $50. - Procter & Gamble shares gain as much as 2.7% with analysts increasingly positive on the consumer
products maker after its Thursday investor event
We walked away confident in Procter’s outperformance over the next 12 months, Evercore ISI analyst Robert
Ottenstein writes in a note to clients. While management anticipates volatility will continue, China which has
been a key weak spot seems to have bottomed with Singles’ Day coming in on plan and SK-II stabilizing,
Ottenstein says. He also notes the company’s high confidence in reaching its long-term growth targets even if
tariffs increase. Rates outperform with PT $183. We came away encouraged by management’s focus on
category-growing innovation, commitment to investment, and actions to drive supply chain productivity and
advertising efficiency, Raymond James analyst Olivia Tong writes. Anticipates consumer staples investors will
increasingly see P&G as one of the better positioned to consistently compound in a sector that has become
more volatile of late. Rates outperform with PT $190. - SMCI too important for AI to be delisted: Lynx
Shares of Super Micro Computer Inc (NASDAQ:SMCI) soared sharply last week after the AI server maker
unexpectedly introduced an independent audit firm and submitted a compliance plan to NASDAQ. The move
aims to prevent the company’s delisting, though formal approval from NASDAQ and an extension for its 10-K
filing are still pending
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