Key Square Group LP founder and CEO Scott Bessent (middle) is interviewed in Washington, DC, in June 2024.
Stephanie Reynolds | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
market rebound
US stocks appeared There were broad gains on Monday, with major stock indexes hitting record highs. Contrary to Wall Street, Asia-Pacific markets were mostly lower on Tuesday. Japanese Nikkei 225 Index fell 1.38%, while mainland China and Hong Kong markets hovered near flat lines.
Wall Street loves Bessant
President-elect Donald Trump’s pick for U.S. Treasury Secretary Scott Bessent has received strong approval from the stock and bond markets. Wall Street strategists are full of praise for Bessent; global analysts also believe that Trump’s choice is beneficial to the market.
More tariffs on more countries
Reuters reported that Trump vowed on Tuesday to increase tariffs on Chinese goods exported to the United States by another 10%. postal About the Truth Society. in another postalTrump said he would impose a 25% tariff on goods from Mexico and Canada. If that happens, Trump will end trade agreement between all three countries.
Safe-haven appeal undermined
gold Prices fell about 3% to $2,616.80 an ounce on Tuesday amid heightened sentiment in the stock market. Investors are in a risk-on mood as Bessant is considered friendly to Wall Street and amid reports that Israel and Hezbollah are moving closer to reconciliation. ceasefire.
(PRO) Global shares are ripe for buybacks
When companies want to return excess capital to investors, they buy back stock. Barclays noted that while European equity markets have been “bleak”, a focus on stocks with buyback potential has delivered “solid performance” in recent months. In its buyback basket, the British bank lists 10 stocks with huge upside potential.
bottom line
Trump’s rallies appear to be reaching a climax.
This time, Trump’s nominee for Treasury Secretary, Scott Bessent, has added fuel to the momentum. Investors like Bessant because, as the founder of hedge fund Key Square Group, he brings knowledge of Wall Street to the job and can backstop markets.
In addition, Bessant said he would prioritize controlling inflation even among policies aimed at supporting domestic growth. “I propose gradually tiering tariffs,” Bessant said. he told CNBC earlier this month ahead of his nomination.
Unlike previous Trump rallies in which specific assets tied to Trump’s policies – bank stocks, small caps and Bitcoin – have seen disproportionate gains, yesterday’s market gains were substantial.
this S&P 500 Index rose 0.3%, with more than three of the index’s four stocks gaining. this Dow Jones Industrial Average Up 0.99%, continuing record high Nasdaq Index Add 0.27%.
Bessant’s nomination isn’t just a boost for large-cap stocks. Small-cap stocks performed even better, likely because Bessant expressed support for Trump’s economic agenda, which would benefit smaller, domestically-oriented companies. this Russell 2000 The small and mid-cap index rose 1.47%, rising for the sixth consecutive day. It closed at a new high, surpassing the record set in 2021.
The bond market also reacted positively to the news. The 10-year Treasury yield fell more than 14 basis points.
“You couldn’t ask for a better reaction from the market,” said Quincy Krosby, chief global strategist at LPL Financial. “This is the market applauding.”
U.S. markets will be closed Thursday for Thanksgiving. Bessent may be one of the things investors will be grateful for.
—CNBC’s Alex Harring and Hakyung Kim contributed to this report.
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