The market is currently living in Trump’s world

On November 19, 2024, US President-elect Donald Trump watched the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas.

Brandon Bell | Getty Images News | 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

Rates will be “gradually” reduced
Fed officials expect Minutes of the Federal Reserve’s November meeting showed that the Fed would “gradually” lower interest rates to a “more neutral stance.” That depends on inflation continuing to “continue to decline toward 2% and the economy remaining close to maximum employment,” in line with Fed officials’ expectations.

The market has shrugged off the threat of tariffs
U.S. markets hit new highs on Tuesday, overtaking President-elect Donald Trump’s threats to impose more tariffs. this S&P 500 Index and Dow Jones Industrial Average It closed at a record high. Asia-Pacific stock markets were mixed on Wednesday. China’s CSI 300 index rose about 1.5%, while China’s industrial profits fell 10% from the same period last year.

Samsung leadership reshuffle
Samsung Electronics announced on Wednesday that it has reshuffled its leadership. Jun Young-hyun is currently the co-CEO and head of Samsung’s memory chip division. ) issued an apology. Other leadership changes include president of foundry operations and chief technology officer.

OpenAI receives $1.5 billion investment from SoftBank
SoftBank is investing $1.5 billion in OpenAI, two people familiar with the matter told CNBC. As part of the deal, OpenAI allowed current and former employees to sell roughly equal amounts of stock. SoftBank has previously invested $500 million in OpenAI, but founder and CEO Masayoshi Son wants a larger stake, according to a source.

(PRO) data likely to show annual inflation rising
The Personal Consumption Expenditures Price Index is the Federal Reserve’s preferred inflation gauge. October’s index is due out on Wednesday, and economists expect the overall number to rise year-over-year.

bottom line

Even before Trump entered the White House, investors were living in his world. This bodes well for the impact Trump will have on the economy and markets as president.

After Trump was elected, the so-called “Trump Trade” With vigorous development, risk assets as a whole show an upward trend.

Market gains briefly stalled as investors priced in higher inflation and lower economic growth as a result of Trump’s policies, but gained momentum after Trump selected Scott Bessent as Treasury secretary. Back to life again.

Recently, Trump announced that he would impose an additional 10% tariff on Chinese goods entering the United States, and a new 25% tariff on goods from Mexico and Canada. Jan Hatzius, chief economist at Goldman Sachs, wrote that these three countries alone account for 43% of U.S. merchandise imports.

“The reality is that the drag on growth from tariffs is likely to be greater than that from tax cuts over the forecast horizon,” said Gregory Daco, chief economist at Ernst & Young Parthenon Bank.

Automakers feel this most acutely, as nearly every company with a U.S. presence produces cars and parts in Mexico — 26% of U.S. imports come from Mexico, according to UBS. automaker stocks General Motors, star and Ford Motor Company Reports that Trump planned to impose tariffs sent stocks lower.

In other words, although individual stocks fluctuated, the market rose. this S&P 500 Index up 0.57% Dow Jones Industrial Average rose 0.28%, and both major indexes hit new closing highs. this Nasdaq Index up 0.63%.

“The market is more comfortable with the prospect of these tariffs, which will be more bravado and more of a negotiating tactic than actual implementation,” said Jamie Cox, managing partner at Harris Financial.