Moore or Less: The Market Rundown

This past week was full of surprises, the latest being the US Fed's decision to lower its key lending rate. At the start of the week US voters headed to the polls. In the end, Donald Trump emerged victorious—proving, once again, that we’re in for a headline-grabbing few years. Political analysts had anticipated a tight race, but Trump won decisively, capturing all swing states, the popular vote, and the electoral college. His victory signals potential market shifts and increased unpredictability in international relations.

Following Trump’s re-election, global markets surged. US stock indices hit record highs, the dollar saw its largest one-day jump in four years, and Treasury yields rose with expectations of increased government borrowing. Bitcoin hit a record high of $75,397, and Tesla and US bank stocks rose sharply. Meanwhile, European renewable companies saw declines as investors responded to the anticipated policy shifts under Trump’s leadership. Economists predict that his presidency could lead to higher US interest rates, potentially impacting global rates, including those in South Africa. In both the US and the UK, expectations for future rate cuts may be significantly scaled back from what many initially anticipated. In the US, rates could stay higher for an extended period, as the Federal Reserve will need to proceed cautiously until it can better gauge the full impact of Trump's policies.

In other international news, Germany faces political turbulence after Chancellor Scholz dismissed Finance Minister Lindner. And with Trump back in office, the EU braces for potential new trade barriers—because who doesn’t love a good tariff tango?

On a brighter note, the IMF projects global inflation to drop to 5.8% this year and down to 4.3% by 2025. A survey by the World Economic Forum reveals that 54% of economists expect stability ahead, though 37% see potential for a downturn. Guess the economists are giving us a classic half-full or half-empty choice.

In South Africa, fuel prices rose this week as oil prices climbed following the Iran-Israel conflict. The rand has strengthened against the dollar since last week and now trades at R17.36. Meanwhile, South Africa and the UK have agreed to strengthen trade and defence ties, with bilateral trade reaching R133 billion ($7.62 billion) last year. South Africa’s private sector grew in October, as reflected by a Purchasing Managers Index (PMI) of 50.6, slightly down from September’s 51.0. Notably, input costs fell for the first time in over four years, thanks to a stronger rand, lower fuel prices, and reduced interest rates.

Overall, this week brought some big changes, and Trump’s influence will surely be felt worldwide. It’s often said that every country gets the government it deserves, and America now faces a second administration led by Donald Trump. But the rest of the world didn’t vote in the US election—so, does it deserve what comes next? And what, exactly, does that entail? As we head into the future, one thing’s for sure: the world is moving into a new era, and we’d better keep up!