Investing
Stocks climb while dollar falls as markets cheer US Treasury pick
Published by Jessica Weisman-Pitts
Posted on November 25, 2024
Global Banking and Finance Review
Company
Published by Jessica Weisman-Pitts
Posted on November 25, 2024
By Sinéad Carew and Nell Mackenzie
NEW YORK/LONDON (Reuters) -MSCI’s global equities gauge rose and the dollar fell with U.S. government bond yields on Monday as investors welcomed the incoming U.S. President’s selection of fund manager Scott Bessent as the next U.S. Treasury Secretary.
Wall Street indexes gained ground, with the S&P 500 and the Dow touching record highs as investors were encouraged by Donald Trump’s pick for the top economic job. Some cited a focus on tax cuts and others were hopeful he would be fiscally cautious.
U.S. Treasury yields fell sharply as investors speculated on a more moderate than feared U.S. fiscal trajectory.
In an interview published on Sunday, Bessent told the Wall Street Journal that both tax and spending cuts were priorities.
And Bessent had told CNBC earlier in November, before his selection as Treasury secretary, that he would recommend “tariffs be layered in gradually.”
“Bessent understands a lot of different asset classes and is going to help Trump stay very sensitive to market reactions,” said Carol Schleif, Chief Investment Officer, BMO family office noting that investors had worried that other people being considered for the job would take a hard stance on tariffs and spending and think less about the potential market reaction.
“Markets are pretty self-centered. They want to make sure people are paying attention to them or they throw a tantrum.”
At 02:39 p.m. the Dow Jones Industrial Average rose 374.99 points, or 0.85%, to 44,671.50, the S&P 500 rose 10.75 points, or 0.18%, to 5,980.09 and the Nasdaq Composite rose 27.06 points, or 0.14%, to 19,030.68.
MSCI’s gauge of stocks across the globe rose 3.41 points, or 0.40%, to 857.54 while Europe’s STOXX 600 index closed up 0.06% earlier.
The European index had hit a two-week high during its trading session, boosted by the Bessent nomination and comments from the European Central Bank chief economist on monetary policy easing.
In a trading week shortened by Thursday’s U.S. Thanksgiving holiday, key events will include the release of October Personal Consumption Expenditures, the latest GDP estimate, and U.S. Federal Reserve minutes from its last meeting.
Traders are hoping a Fed cut next month, though rate-cut bets have been dialled back in recent weeks.
In Treasuries, the yield on benchmark U.S. 10-year notes fell 14.5 basis points to 4.265%, from 4.41% late on Friday while the 30-year bond yield fell 14.8 basis points to 4.4468%.
The 2-year note yield, which typically moves in step with interest rate expectations, fell 9.4 basis points to 4.275%, from 4.369% late on Friday.
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.12% to 106.80.
The euro was up 0.85% against the dollar at $1.0506 and against the Japanese yen, the dollar weakened 0.45% to 154.04.
The euro had fallen sharply this month on worries over Trump tariffs, deteriorating economic conditions and signs of an escalation in Russia/Ukraine war.
Oil prices fell more than $2 per barrel after reports that Israel and Lebanon had agreed to the terms of a deal to end the Israel-Hezbollah conflict, citing officials from Israel, Lebanon, the U.S. and France.
U.S. crude futures settled down 3.23% or $2.30 at $68.94 per barrel and Brent finished at $73.01 per barrel, down 2.87% or $2.16 on the day.
Bitcoin fell 2% to $94,895 after hitting a record of $99,830 on Friday as investors bet on a friendly regulatory environment for cryptocurrencies under Trump.
Gold prices fell sharply, breaking a five-session rally, as reports of Israel nearing a ceasefire with Hezbollah, coupled with Trump’s Treasury Secretary pick, tarnished demand for the safe-haven precious metal.
Spot gold fell 3.22% to $2,625.22 an ounce. U.S. gold futures fell 2.56% to $2,640.40 an ounce.
(Reporting by Sinéad Carew, Nell Mackenzie, Tom Westbrook, Kevin Buckland; Editing by Dhara Ranasinghe, Kim Coghill, Stephen Coates, Jan Harvey, Ed Osmond, William Maclean)
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