[New York Stock Market] "Thank You Trump" Three Major Indexes Hit New Highs Again... Bitcoin Surpasses $87,000

Tesla Soars 9%... Bitcoin Hits New High Again
Trump's 'Pro-Business Policy' Effect Anticipated
Focus on This Week's CPI, PPI Inflation Indicators

On the 11th (local time), the three major indices in the U.S. New York stock market once again hit all-time highs. The 'Trump rally' continues following the election victory of former President Donald Trump, who promised pro-business policies. Tesla, a major beneficiary of Trump, surged nearly 10%, and Bitcoin prices surpassed $87,000, reaching an all-time high.

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On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 44,293.13, up 304.14 points (0.69%) from the previous trading day, setting a new record. The large-cap-focused S&P 500 index rose 5.81 points (0.1%) to 6,001.35, and the tech-heavy Nasdaq index increased by 11.99 points (0.06%) to 19,298.76, also marking all-time highs. Notably, the Dow Jones and S&P 500 indices surpassed the 44,000 and 6,000 levels respectively for the first time based on closing prices.

By individual stocks, Trump beneficiary stocks showed strength. Tesla, whose CEO Elon Musk had early on declared support for Trump’s election, surged 9.06%. Trump Media & Technology (DJT) jumped 4.7%. Financial stocks also rose on expectations of deregulation under Trump’s presidency. JPMorgan Chase rose 0.97%, while Goldman Sachs and Bank of America (BoA) gained 2.18% and 2.11%, respectively. However, other tech stocks except Tesla showed weakness. Apple fell 1.2%, and Nvidia and Microsoft (MS) dropped 1.61% and 1.07%, respectively.

Cryptocurrencies, favored by Trump’s pro-business policies, soared. Bitcoin, the leading cryptocurrency, surpassed $80,000 for the first time the previous day on hopes of deregulation, and within a day rose further to $87,000. According to Coinbase, as of 4:22 PM Eastern Time, Bitcoin was trading around $87,970, up 11.05% from the previous day.

Trump’s announcement of pro-business policies such as corporate tax cuts and deregulation has raised expectations that companies will benefit significantly, stimulating investor sentiment. Especially, with the Republican Party, to which Trump belongs, likely to control both the Senate and the House of Representatives following the November 5 elections, the possibility of a 'Red Wave' has increased, boosting expectations that Trump’s pledges will be realized.

Ed Yardeni, head of Yardeni Research and a leading Wall Street bull, analyzed, "Stock investors are cheering the regime change that promotes tax cuts and deregulation through pro-business actions." Yardeni also raised his S&P 500 forecasts to 6,100 in 2024, 7,000 in 2025, and 8,000 in 2026, upward from previous estimates.

Chris Larkin, Managing Director of Investments at Morgan Stanley E*TRADE, said, "The key question is whether the bull market, amid elections and further interest rate cuts, can drive the market to new highs," adding, "Profit-taking due to the strong rally and this week’s inflation data will determine whether the market continues to rise."

Additionally, the Federal Reserve’s interest rate cut also acted as a catalyst for the stock market rise. Earlier, at the November Federal Open Market Committee (FOMC) meeting on the 7th, the Fed lowered the benchmark interest rate by 0.25 percentage points from 4.75-5.0% to 4.5-4.75%. This was the second rate cut since the 'big cut' of 0.5 percentage points in September, which marked the start of the easing cycle after the rate hikes beginning in March 2022.

Investors are focusing on inflation data to be released this week. On the 13th, the October Consumer Price Index (CPI) will be announced, followed by the October Producer Price Index (PPI) on the 14th. The key is whether the inflation data will support a disinflation trend (a decline in the inflation rate). Last month’s CPI rose 2.4% year-on-year, maintaining the same level as September, while the PPI is expected to have increased 0.2% month-on-month, up from 0% in September.

Government bond yields are rising, especially the 10-year notes. The U.S. 10-year Treasury yield, a global bond yield benchmark, is currently trading around 4.33%, up 2 basis points (1bp = 0.01 percentage points) from the previous day. The 2-year Treasury yield, sensitive to monetary policy, remains steady at 4.25%.

The dollar is strong. The Dollar Index, which measures the dollar’s value against six major currencies, rose 0.49% to 105.4 compared to the previous day.

International oil prices fell due to disappointment over China’s economic stimulus measures. West Texas Intermediate (WTI) crude oil closed at $68.04 per barrel, down $2.34 (3.32%) from the previous day, while Brent crude, the global oil price benchmark, fell $2.04 (2.76%) to $71.83 per barrel.