(Bloomberg) – Stocks and Treasuries rose as traders hailed Donald Trump’s nomination of Scott Bessent as Treasury Secretary as a prudent choice that will bring more stability to the U.S. economy and financial markets.
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Europe's Stoxx 600 index rose 0.3% as US stock futures rose. The positive atmosphere continued from Asia. Meanwhile, the yield on the 10-year US Treasury note fell 6 basis points to 4.34%. While the dollar fell, Bitcoin rebounded from the weekend's decline.
This market move marks a reversal of some of the factors that define the so-called Trump trade, including a strong dollar and a rally in Bitcoin. Enthusiasm for these assets has cooled as traders roll back hopes for the next president's tax cuts and tariff hikes, policies that could keep interest rates rising and support the dollar. .
Mr. Bessent, who runs the macro hedge fund Key Square Group, has signaled his support for President Trump's tariff and tax cut plans, but investors are more concerned about the economy and markets than about him scoring political points. It is expected that stability will be prioritized. The nomination eased concerns about the president-elect's protectionist policies, which threatened to cause inflation, exacerbate trade tensions and increase market volatility.
“We're obviously discussing Trump's reflationary policy with economic officials at the Treasury who are probably more gradualist,” Vincent Juvins, global market strategist at JPMorgan Asset Management, told Bloomberg TV. ” he said. “American exceptionalism will persist to some extent, not just economically but also in markets.”
Bloomberg's dollar index fell by the most in more than two weeks. Traders betting on President Trump's fiscal policies, which include significant trade tariffs and sustained economic growth, pushed the dollar higher for eight straight weeks through Friday.
The euro rose against the dollar after European Central Bank board member François Villeroy de Galhau said ECB policy would evolve no matter what happens at the Federal Reserve.
Corporate trading caught the attention of traders on Monday morning. UniCredit SPA has launched a 10 billion euro ($10.6 billion) all-stock buyout of domestic rival Banco BPM, opening a second major takeover front with Commerzbank also pursuing it.
Banco BPM shares rose 8.5%. Commerzbank fell 7.2% and UniCredit shares fell 2.5%.
Meanwhile, Anglo American has agreed to sell its steelmaking coal business to Peabody Energy for a fee that could reach up to $3.78 billion, as the mining company's restructuring accelerates. Announced. Anglo American shares rose in London.
ITV Plc's share price rose as much as 9.5%, its highest level since March, after a Sky News report said the company was attracting interest from potential buyers.
Looking to the outlook for U.S. stocks, RBC Capital Markets strategist Lori Calvasina predicted the S&P 500 index would reach the 6,600 level by the end of 2025, rising about 11%. According to the RBC team, stocks remain susceptible to declines in the short term after the index rose 25% through 2024, but this year continues to see strong economic and profit growth, some political tailwinds and additional He said it is likely to benefit from easing inflation.
Japan, US data
Oil fell after Israel said it could take days to reach a cease-fire agreement with Lebanon's Hezbollah. Gold also fell after last week's biggest rally in 20 months.
Asian traders will be closely monitoring Japan's inflation data this week after Bank of Japan Governor Kazuo Ueda hinted last week that the December policy meeting would be broadcast live. The Reserve Bank of New Zealand is expected to cut its key interest rate on Wednesday.
Elsewhere, there will be a wide range of inflation and growth measurements in Europe. Traders will closely analyze the minutes of the U.S. Federal Reserve's November meeting, consumer confidence and consumer spending data to help assess the prospects for rate cuts next year.
This week's main events:
BOE Deputy Governor Claire Lombardelli and rate setter Swati Dhingra speak on Monday
ECB Chief Economist Philip Lane and Governing Board Member Gabriel Makhlouf speak on Monday
National Bank Deputy Governor Anna Seim speaks on Tuesday
US FOMC Minutes, New Home Sales, US Conference Board Consumer Confidence, Tuesday
Rhys Mendes, Deputy Governor of the Bank of Canada, speaks on Tuesday.
China's industrial profits Wednesday
New Zealand interest rate decision Wednesday
US PCE, new unemployment insurance claims, GDP, durable goods, Wednesday
Bank of Australia Governor Michelle Bullock speaks on Thursday
