DaiShin Securities predicted that, following the Federal Open Market Committee (FOMC), which delivered gifts in the form of a benchmark interest rate cut and short-term government bond purchases, President Donald Trump will become the second Santa Claus of December.
On December 12, DaiShin Securities researchers Moon Namjoong and Moon Geonwoo stated in the "The Global Radar Weekly" report, "The first Santa of December, the FOMC, delivered gifts of a 0.25 percentage point rate cut and short-term government bond purchases. Until the Federal Reserve’s rate cut cycle ends, expectations for further monetary easing will continue to drive inflows of funds into the stock market."
The report highlighted, "After the December FOMC, the second Santa will be Trump," noting that "in November and December, Trump has been unveiling a series of events that could be positive for the stock market." Notable examples include the planned signing of an executive order to foster the robotics industry next year and the approval of exports to China of Nvidia’s H200 artificial intelligence (AI) semiconductor.
The report also stated, "Given the ongoing media campaigns regarding the nomination of the next Federal Reserve (Fed) Chair around the December FOMC, it is highly likely that the nomination will take place not early next year, but rather around this year’s Christmas." It predicted, "Through this, Trump will likely seek to claim credit for the historic record highs being set by the U.S. stock market this year."
Currently, Kevin Hassett, Chairman of the White House National Economic Council (NEC), is considered the near-certain nominee for the next Fed Chair. Hassett was known for supporting central bank independence during the first Trump administration. The report stated, "Rather than blindly following Trump’s calls for an accommodative monetary policy, Hassett is expected to show flexibility by basing monetary policy decisions on economic indicators such as inflation and employment conditions." It added, "He is expected to fulfill his role as Fed Chair by balancing the demands of both Trump and the financial markets."
The report continued, "The December Santa Rally is already underway," and analyzed that "the increased stock market volatility around key events that the financial markets consider important will present opportunities to increase portfolio allocations." Major upcoming economic indicators and events next week include China’s November industrial production and retail sales (December 15), U.S. November nonfarm payrolls and unemployment rate (December 16), U.S. November Consumer Price Index (CPI, December 18), European Central Bank (ECB) monetary policy meeting (December 18), and Bank of Japan (BOJ) monetary policy meeting (December 19).
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