BLUES ACADEMY’s Post

𝐖𝐨𝐫𝐥𝐝 𝐬𝐡𝐚𝐫𝐞𝐬 𝐬𝐭𝐚𝐫𝐭 𝟐𝟎𝟐𝟓 𝐰𝐢𝐭𝐡 𝐚 𝐰𝐨𝐛𝐛𝐥𝐞 𝐨𝐧 𝐓𝐫𝐮𝐦𝐩 𝐭𝐫𝐞𝐩𝐢𝐝𝐚𝐭𝐢𝐨𝐧 Global stock markets have started 2025 with uncertainty and volatility, primarily due to concerns over incoming U.S. President Donald Trump's policies and a more hawkish Federal Reserve outlook. While global shares had closed 2024 with a strong annual gain of nearly 16 percent, they experienced a monthly loss of over 2% in December, with European stocks easing during the first trading session of 2025 and Chinese stocks ending sharply lower, logging their weakest New Year start since 2016. The market uncertainty is further amplified by potential shifts in economic strategies, with China's President Xi announcing plans for more proactive policies to boost growth, while concerns mount over Trump's proposed 60% tariffs on Chinese imports. Analysts, including Bruno Schneller of Erlen Capital Management and Yingxi Wang of AXA Investment Managers, warn that Trump's return could amplify external risks and potentially create a debt-deflation trap if stimulus measures are delayed or misdirected, particularly impacting China's emerging market economy. 𝐖𝐚𝐥𝐥𝐬𝐭𝐫𝐞𝐞𝐭 𝐏𝐫𝐞𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐬 Wall Street forecasts continued economic and market growth in 2025, though at a slower pace than 2024's 24% stock market gains and 2.8% GDP growth. Goldman Sachs projects 2.5% GDP growth, while JPMorgan and Morgan Stanley expect roughly 10% S&P 500 growth, with potential upside to 25% in bullish scenarios. Key predictions include broader market participation beyond the Magnificent Seven tech stocks, with Goldman Sachs recommending defensive sectors including materials, software, healthcare, utilities, and real estate. AI investment is expected to shift focus toward infrastructure beneficiaries, particularly in electricity production, data centers, and transmission. President-elect Trump's promises of tax cuts and deregulation have bolstered business confidence, while falling inflation and stable employment are expected to support consumer spending, which remains central to economic growth despite slight moderation from 2024 levels.

KE:  𝐖𝐨𝐫𝐥𝐝 S𝐡𝐚𝐫𝐞𝐬 S𝐭𝐚𝐫𝐭 𝟐𝟎𝟐𝟓 𝐰𝐢𝐭𝐡 𝐚 W𝐨𝐛𝐛𝐥𝐞 𝐨𝐧 𝐓𝐫𝐮𝐦𝐩 T𝐫𝐞𝐩𝐢𝐝𝐚𝐭𝐢𝐨𝐧 Global stock markets have started 2025 with uncertainty and volatility, primarily due to concerns over incoming U.S. President Donald Trump's policies and a more hawkish Federal Reserve outlook. While global shares had closed 2024 with a strong annual gain of nearly 16 percent, they experienced a monthly loss of over 2% in December, with European stocks easing during the first trading session of 2025 and Chinese stocks ending sharply lower, logging their weakest New Year start since 2016. The market uncertainty is further amplified by potential shifts in economic strategies, with China's President Xi announcing plans for more proactive policies to boost growth, while concerns mount over Trump's proposed 60% tariffs on Chinese imports. Analysts, including Bruno Schneller of Erlen Capital Management and Yingxi Wang of AXA Investment Managers, warn that Trump's return could amplify external risks and potentially create a debt-deflation trap if stimulus measures are delayed or misdirected, particularly impacting China's emerging market economy. 𝐖𝐚𝐥𝐥𝐬𝐭𝐫𝐞𝐞𝐭 𝐏𝐫𝐞𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐬 Wall Street forecasts continued economic and market growth in 2025, though at a slower pace than 2024's 24% stock market gains and 2.8% GDP growth. Goldman Sachs projects 2.5% GDP growth, while JPMorgan and Morgan Stanley expect roughly 10% S&P 500 growth, with potential upside to 25% in bullish scenarios. Key predictions include broader market participation beyond the Magnificent Seven tech stocks, with Goldman Sachs recommending defensive sectors including materials, software, healthcare, utilities, and real estate. AI investment is expected to shift focus toward infrastructure beneficiaries, particularly in electricity production, data centers, and transmission. President-elect Trump's promises of tax cuts and deregulation have bolstered business confidence, while falling inflation and stable employment are expected to support consumer spending, which remains central to economic growth despite slight moderation from 2024 levels. ~Fintech Association of Kenya

Global Markets Performance (Week Ending Dec 13) Global and U.S equity markets ended lower despite mild gains in the Nasdaq index as the post-election rally lost momentum and investors looked ahead to a key US Federal Reserve meeting next week. Nasdaq index recorded marginal gains during the week supported by the performance of Alphabet and Tesla shares. The launch of artificial intelligence tool Gemini 2.0 with powerful imaging and audio capabilities features, a new quantum computing chip which was described as breakthrough for the company supported share prices of Google. The post-U.S election really and investor enthusiasm for the company supported Tesla prices. Nvidia faltered during the week after chip titan Broadcom reported strong results and posed risks to Nvidia's competitive edge. U.S core prices increased 3.3% y/y in November, unchanged from the prior month. Headline inflation accelerated modestly to 2.7% y/y, up from 2.6% y/y in October. U.S headline and core (less food and energy) consumer price inflation (CPI) rose by 0.3% m/m in November and were in line with consensus expectations. U.S 10Y treasury yields inched up to 4.40%, compared to the 4.15% in the previous week, due to higher-than-expected U.S wholesale inflation. In local currency terms, the pan-European STOXX Europe 600 Index ended 0.77% lower, as investors debated whether the European Central Bank (ECB) has been easing monetary policy fast enough to support the struggling economy. The ECB lowered its key deposit rate by a quarter of a percentage point to 3.0%, the fourth reduction this year. Chinese stocks fell as recent policy announcements underwhelmed investors. China pledged to implement a more proactive fiscal policy and increase the budget deficit in 2025 but failed to lift investor sentiment. Gold (2,648.4 $/oz) ended higher during the week, supported by escalating geopolitical tensions and rising expectations of another rate cut by the U.S. Federal Reserve in December. Bitcoin ($101,435) surged during the week as boosted by bullish comments by Trump to add Bitcoin as a strategic reserve.

Trump 2024: Stock Markets Brace for Impact with a Dash of Quirk! 🌍📈 As the dust settles on the surprising victory of Donald Trump in the 2024 U.S. presidential election, global stock markets are buzzing with anticipation. How will this seismic shift in American politics ripple across the world? Let’s break down the expected impacts on the stock indices of ten major countries! Buckle up—this is going to be a quirky ride! 🎢 United States: The Dow Jones could experience a rollercoaster as investors weigh Trump's policies on trade and taxation. Think “Trump Bump” 2.0 – expect a flurry of tweets of stock market highs! China: With Trump's unpredictable trade policies, we might see the Shanghai Composite index fluctuate like a yo-yo. Watch out for import tariffs making tech stocks jump or dive! Germany: The DAX might just get a stronger espresso shot as European exporters react to potential new tariffs and global supply chain shifts. “Ja, bitte!” to more uncertainty in markets! United Kingdom: The FTSE 100 could experience a mini rollercoaster, as Brexit connections with the U.S. bring both hope and dread to investors. Will London become the next Wall Street? Japan: The Nikkei could soar and dive in tandem with the yen's status. Trump’s stance on Asia will play a pivotal role—let’s hope it doesn’t leave investors in a sudoku! India: The Sensex might find new paths as Indian tech stocks face increased competition with U.S. markets. Get ready for some spicy shifts on the trading floor! 🌶️ Brazil: The Bovespa index may dance to a samba rhythm if U.S.-Brazil relations warm up. Exporters might benefit, but beware of volatility arising from policy changes! Canada: TSX could feel a chill or a warm breeze depending on U.S. energy policies. A pro-oil Trump could see Canadian crude stocks thrive—let’s raise a maple syrup toast! 🍁 Australia: The ASX might find new leads as mining stocks react to U.S.-China relations under Trump's presidency. Mining boom or bust, mate? South Korea 🇰🇷: The KOSPI could swing dramatically with the fate of conglomerates at stake. Will Samsung dance or stumble under pressure? Only time will tell! In conclusion, as we venture into this new chapter, expect market reactions ranging from excitement to apprehension. Investors worldwide should keep their eyes peeled and their portfolios diversified. Remember, in finance, as in life, expect the unexpected! 🌀💡 #Trump2024 #GlobalMarkets #StockMarket #Investing #FinanceTrends #EconomicForecast #MarketVolatility #WorldEconomy #InvestmentStrategy #LinkedInFinance #USelections

Goldman’s Rubner Sees ‘Buy China’ Trade Playing After Election Chinese stocks have been on a tear, with the Nasdaq Golden Dragon Index soaring 19% in the last four days, and the shares should be a key part of investors’ plans once the US election is over, according to Scott Rubner, managing director for global markets and tactical specialist at Goldman Sachs Group Inc. “I really think this time is different for China,” Rubner wrote in a note to clients Thursday, noting that being underweight Chinese equities is the “largest consensus trade” in the global stock market. “Re-emerging markets have quickly become a favored post-US election trade for November and December,” he wrote, referring to demand for bullish call options expiring at the end of the year. Take hedge funds. Before the recent gains, they’d allocated less than 7% of their capital to Chinese equities, roughly a five-year low. Indeed, since the start of 2023, Chinese stocks remain meaningfully net sold by hedge funds in cumulative notional terms. But the bigger boost could come from passive investors. Of the $695 billion of inflows for US-listed exchange-traded funds in 2024, only $4.9 billion has gone into Chinese ETFs. https://lnkd.in/ekVqz-Qi

While everyone is distracted by the stock market fireworks, the Chinese bond markets is sending a very different message. The Chinese stock market seems unstoppable. The $FXI ETF which tracks Chinese equities is now 31% above its 200-day moving average. For reference, this only happened twice over the last 20 years: 1) During the 2007 buy-everything mania 2) When China delivered a real, concrete stimulus bazooka in 2009 Investors are now left wondering: is China going to really deliver fiscal stimulus? The Chinese bond market is loudly saying ''no, we don't buy that''. The chart below shows the market-implied Chinese rates between 2029 and 2034 (in fancy bond jargon: 5-year forward, 5-year OIS rates). Notice that the PBOC has just cut rates to ~1.5% so that’s our starting point. Now: if the bond market would believe in such an upcoming, gigantic fiscal bazooka you’d expect the curve to steepen aggressively and forward bond rates to move up by a lot. Instead, Chinese bond markets still price the prevailing medium-term rates to be below 2% in China. Effectively, Chinese bond markets are saying this. ‘’We understand the announcement has stopped people out of China, copper, and AUD shorts’’. ‘’But we don’t see any evidence of proper economic/fiscal stimulus, so we expect rates to remain suppressed over the long run’’. The question is: who do you believe? The Chinese stock or the Chinese bond market? P.S. If you liked this post, you will love my macro research. Get a 2-weeks FREE trial to my institutional macro research using this link: 👇 https://lnkd.in/dVvCmRSA

https://lnkd.in/gSE4gJpz (Bloomberg) -- Chinese stocks declined after a high-profile legislative meeting disappointed investors who had been hoping for large-scale stimulus to boost the economy and end a deflationary cycle.The CSI 300 Index was down 0.4% as of 9:40 a.m. local time, while a gauge of Chinese stocks trading in Hong Kong dropped more than 2%. Both gauges trimmed bigger losses seen at the open. The declines followed a 4.7% tumble in the Nasdaq Golden Dragon China Index in the US on Friday. Investors had pinned their hopes on the Standing Committee meeting of the National People’s Congress to offer fresh catalysts for the stock market, especially after Donald Trump’s presidential victory injected fresh uncertainty over tariffs. Beijing announced a 10 trillion yuan ($1.4 trillion) program to help local governments tackle their hidden debt on Friday but stopped short of providing new stimulus to bolster consumption. Chinese data released over the weekend underscored the urgency for more pro-growth efforts, with consumer price growth remaining close to zero and factory-gate prices continuing to fall. UBS lowered its 2025 growth forecast for China following Trump’s election, expecting an “around 4%” expansion for 2025, and a “considerably lower” pace in 2026. “With perceived emphasis on stabilization rather than stimulus, and no measures to facilitate bank recapitalization and/or boost consumption, we think this will come as a disappointment for stock investors, even though the headline debt-swap numbers were ahead of expectations,” Nomura Holdings Inc. strategists led by Chetan Seth wrote in a note.  Overseas companies are also pulling their money out of China as the growth outlook turns gloomier. Foreign direct investment slid almost $13 billion in the first nine months of the year, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth.The CSI 300 Index, a benchmark for onshore shares, fell 1% on Friday as traders grew jittery before the NPC announcement. The gauge rallied nearly 35% from a September low through Oct. 8, but has largely moved sideways since then. 

This is an excellent summary of why you should be sceptical that fiscal stimulus will be delivered on a large scale. There are deeper reasons I will discuss in a follow-up post.

Europe Asia or USA for Stock Investments? US has constantly outperformed Europe and Asia for ten years. I believe it’s likely to continue. Thoughts? #deVere #investment #stock #finance

Trump's return will extend US stocks' dominance over global rivals.Why? 1) U.S. stocks are extending their lead over global peers and some investors believe that dominance will grow if President-elect Donald Trump can implement his economic platform without becoming mired in a full-blown trade war or ballooning the federal deficit. 2) Some market participants believe Trump’s agenda of tax cuts, deregulation and even tariffs can further fuel U.S. exceptionalism, outweighing worries over their potentially disruptive nature and inflationary potential. "Given the pro-growth tendencies of this new administration, I think it's tough to fight the battle against U.S. equities, at least in 2025," said Venu Krishna, head of U.S. equity strategy at Barclays. 3) Signs of a growing U.S. bias were evident immediately after the Nov. 5 election, when U.S. equity funds received more than $80 billion in the week following the vote while European and emerging market funds saw outflows, according to Deutsche Bank. 4) A critical driver of U.S. strength is corporate America's profit edge: S&P 500 company earnings are expected to rise 9.9% this year and 14.2% in 2025, according to LSEG Datastream. Companies in Europe’s Stoxx 600, by contrast, are expected to increase earnings by 1.8% this year and 8.1% in 2025. Please get invested and stay long the USA! "The U.S. continues to be the geographic region of the world that generates the highest earnings growth and the most profitability," said Michael Arone, chief investment strategist at State Street Global Advisors.