S&P 500 blows past 6,000 points on Trump presidency

Reuters

S&P 500 blows past 6,000 points on Trump presidency

2024 11월 8, 오후 7:43 GMT

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Updates prices

China unveils steps to tackle 'hidden' debt of local governments

Treasury yields sag as Fed signals careful, patient easing path

Wall St hits record high again; world stocks up 3% this week

By Dhara Ranasinghe and Koh Gui Qing

NEW YORK/LONDON, Nov 8 (Reuters) -The U.S. S&P 500 zoomed past 6,000 points on Friday to a new record while Treasury yields retreated, as investors again cheered Donald Trump's decisive victory, although disappointment about China's latest fiscal support dampened the mood elsewhere.

A day after the Federal Reserve delivered a quarter-point rate cut, as anticipated, the focus returned to the fallout of Tuesday's U.S. presidential election and headlines out of Beijing.

The offshore yuan weakened, while U.S.-listed shares of Chinese firms and China exposed-sectors in Europe sank as investors took in news that China's stimulus did not directly inject money into the struggling economy.

But investors on Wall Street shrugged off frustration about the lack of a Chinese fiscal bazooka and bought U.S. stocks. The S&P 500 index .SPX climbed 0.6% to cross the 6,000-point mark, the Dow Jones Industrial Average .DJI climbed 0.8%, and the Nasdaq Composite .IXIC added 0.2%. The S&P 500 and the Dow are set for their best week in a year. .N

Shares of electric car maker Tesla TSLA.O, whose chief executive, Elon Musk, became one of Trump's biggest supporters in the last leg of his reelection campaign, shot up 10%, catapulting its market capitalization to $1 trillion for the first time since 2022.

Nicholas Colas, a co-founder of DataTrek Research LLC, said there are several reasons for buying U.S. stocks: "The Fed is cutting rates, and the U.S. economy is still strong."

In addition, the Republican party won not only the White House this week, but also control of the Senate, and may win control of the House of Representatives - a similar scenario, Colas said, to the November 2016 election outcome that preceded the S&P 500's 22% gain in 2017.
Investors are betting that a Trump administration will bring lighter regulation and tax cuts that could boost the U.S. economy.

Outside the United States the mood was more subdued. A MSCI index for world stocks .MIWD00000PUS was flat, but still close toa record high, while the pan-European STOXX 600 .STOXX lost 0.7%.

"What you are going to get because of the clean sweep is a mandate to improve the U.S. economy. So, taxes will come down, bureaucracy will ease and regulation will become lighter," said Guy Miller, chief markets strategist at Zurich Insurance Group.

"Between now and year-end, there is a tailwind for U.S. stocks. The U.S. market has potential," he said.

Germany's DAX stock index fell0.8% a day after posting its best daily performance of 2024 so far .GDAXI, helped by expectations that Germany could scrap its debt brake.

CHINA DISAPPOINTS

China unveiled a 10 trillion yuan ($1.40 trillion) debt package to ease local government financing strains and stabilize flagging economic growth.

Finance Minister Lan Fo'an said more stimulus was coming, with some analysts saying Beijing may not want to fire all its financial weapons before Trump takes over officially in January.

Mainland blue chips .CSI300 fell 1%, a day after rising3%. Hong Kong's Hang Seng <.HSI> also slidin a sign of some caution ahead of the announcement.

The offshore Chinese yuan fell0.7% to7.2011 per dollar CNH=EBS. China-exposed European luxury .STXLUXP and mining stocks .SXPP each fell over 3%.

FED CUTS

U.S. Treasury yields fell after Fed Chair Jerome Powell on Thursday signaled continued, patient policy easing.

The Fed's rate cut followeda quarter-point cut from the Bank of England and a large half-point cut by Sweden, also on Thursday.

Ten-year Treasury yields fell 8.3 basis points to 4.343% US10YT=RR, reversing sharp rises following the U.S. election result.

Powell said Tuesday's election result would have no "near-term" impact on U.S. monetary policy.

"The Fed pointed to a more uncertain economic outlook and inflation remaining elevated," said Mahmood Pradhan, head of global macroeconomics at the Amundi Investment Institute.

"Together with a likely change in policy direction under the new administration, we expect a more uncertain and measured pace of easing next year."

The dollar index =USD, which measures the currency against six major peers, rose to 105.04, following a 0.7% drop on Thursday, its biggest since Aug. 23. On Wednesday, it soared 1.53%, the most in over two years, a sign of increased volatility as investors assess the new Trump administration's policies.

The euro and sterling both fell against the dollar EUR=EBS, GBP=D3, while the dollar slipped 0.1% to 152.73 yen JPY=EBS.

Bitcoin BTC= jumped 1.6% to $77,095, a record high, following a nearly 10% surge this week. Trump has vowed to make the United States "the crypto capital of the planet."

After a roller-coaster week, gold XAU= fell 0.8% to $2,684.99. It slumped more than 3% on Wednesday, but bounced 1.8% overnight. Last week it surged to an all-time high of $2,790.15.

Brent crude oil futures LCOc1 pared losses during London trade and were last down 2.4% at $73.80, U.S. West Texas Intermediate crude CLc1 fell 2.9% to $70.26.

World FX rates YTD http://tmsnrt.rs/2egbfVh

Asian stock markets https://tmsnrt.rs/2zpUAr4

European shares mostly lower https://reut.rs/3UKnCuD

G10 central bank interest rates Nov. 7, 2024 https://reut.rs/3CiHajt

Reporting by Dhara Ranasinghe in London and Kevin Buckland in Tokyo; Editing by Kevin Liffey, Philippa Fletcher, Richard Chang and Leslie Adler

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