Customs tariffs going to rise? We don’t care! Political and economic uncertainties? We don’t care! An inflationary policy that does not explain to us how to reduce a debt that continues to explode? WE CARE NO MORE! A President who appoints jerks to (almost) all key positions in American politics? Once again: It’s like the year 40! Good. At the same time when we see politicians all over the world, we can say to ourselves that even a goat could save the world economy, the fact remains that yesterday the effect of customs tariffs AGAIN defied all reason and the The only ones who contributed were the Europeans.
The Audio of November 27, 2024
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The investor’s memory
I know that we have short memories – not to say very short – but if you remember a little of what I told you yesterday, you should still note that during a very brief period of the night from Monday to Tuesday , markets became concerned that Trump could destabilize the US economy and pose some problems for imports and exports. This means that (for a brief moment), American futures were trading in negative territory because participants feared that the rash actions of their president, who has not yet joined the White House, could destabilize the American economy a little. . Well, this reflection only lasted a few minutes and since then, the American stock markets have only gone up.
The previous day’s performances were not stratospheric and the stock markets were not as volatile as the Microstrategy share price, but let’s say that when we look at the closing records of the Dow Jones and the S&P500, we say to ourselves that Trump still has a unique talent, since whatever he does and whatever he says, the market listens to him and finds it “so cool”. I don’t know if Donald 2.0 has hidden talents or if the four years of vacation he took allowed him (between two trials) to find THE SOLUTION to make America GREAT AGAIN, but let’s say that last night at 10:00 p.m., watching the S&P500 finish at more than 6,020, there was reason to ask questions. Either way, it seems that no matter what Trump says, in the end the markets still go up.
In the end it’s Europe that takes it in the face
Finally, when we take stock of this last session before a slow Wednesday to pack up for the weekend and the Thursday of Thanksgiving, we will remember that those who were taken aback by Trump’s declarations, it is Europe. Because even if at first we feared for the performance of the US economy before changing our minds and saying that Trump was going to make America Great Again, we still realized that he was going there when even there was a loser in this story and the loser was called: THE STRANGER. So yes, Trump announced that he was going to bring misery to Canadians and Mexicans. And a little to the Chinese. But the European markets, which are not very strong in geography, suddenly felt targeted by the declarations of the former future American President.
We can’t blame them, because it seems quite logical that in the end, they will also take it in the face, even if Germany or France does not have the slightest border. directly with the USA. Since Americans don’t know where Canada and Mexico are on Google Maps anyway, yesterday we could consider that we had to put everyone in the same basket. European stock markets therefore ended the day in the red, worrying to death just at the thought of what Trump was going to do to them. Once again, it’s the cars that have taken a hit just in case Trump’s customs tariffs prevent Renault from normally exporting Clio Diesels to states like Texas. Texas where – it is common knowledge – it is extremely common to come across French cars. Brief. All this to tell you that yesterday, the American markets were delighted at the idea of seeing Trump return to the White House, because we will still have a good laugh, on the other hand, it makes the stock markets of the Old Continent.
Bitcoin, Asia and peace in the Middle East
This morning in Asia the markets are divided again, Japan is down 1% and the rest is up as if the Chinese had absolutely nothing to do with Trump’s customs tariffs and they knew that they would get by without the Americans, knowing that THEY know how to read a map and have certainly noted that Canada and Mexico are not part of Asia. Even if you look hard. As a result, this morning Shanghai is up 0.57% and Hong Kong is up 0.52%. On the oil side, the barrel continues to sink since late yesterday evening, the rumors proved correct and Israel and Hezbollah agreed on a 60-day ceasefire to allow the Lebanese army to deploy in the border area and allow residents to return home in “complete safety”. Finally in what remains of “home” after the bombings. Both Biden and Macron welcomed the success of these negotiations. Biden didn’t really know what he was talking about, as usual, since his last memory was from the time when Obama was President and Macron broadcast a video message to explain how beautiful and strong his government had been on this issue. and that it was mainly thanks to HIM that everything went well. Then he proclaimed himself king of the European Continent because it was well deserved. Still, this morning, a barrel is at $68.80 and a gallon of gasoline will be cheaper for the Thanksgiving transhumance.
On the crypto side, Bitcoin has been in PLS for 2 days. While we were convinced that $100,000 would break this week, we are once again in doubt and the probability of seeing Bitcoin above $100,000 has once again collapsed among the Bookmakers . Currently, the crypto-star is at $93,500 and the most interesting thing to observe is still the behavior of Microstrategy. Michael Saylor’s company, which – I remind you – thinks that Bitcoin will be at 13 million by 2045 – has taken a beating in recent days. It must be said that it had risen much more than Bitcoin itself and the 9% drop in BTC in recent hours had the opposite effect. Last night MSTR lost 12% and since the highs that were posted last week, the stock has lost 35%. It must be said that the volumes that we consider “non-professional” have exploded, since the same guys who were driving Game Stop said to themselves that buying Microstrategy was the best way to “play Bitcoin with leverage”. The slap in recent days has been severe and we wonder if Saylor will be able to borrow again at 0% to buy more Bitcoin. At the same time, when we see the goldfish memory that the markets have, I believe that if Bitcoin passes 100K before Christmas, there are more than one who will be ready to sell their mother and grandmother in exchange of a fraction of Michael Saylor’s vision.
What else to say
For the rest, we note that consumer confidence came out bang as the experts expected, the Americans are in debt up to their necks, whether personally or via their government which no longer has a dime, we are in the midst of uncertainty because Trump appoints scary guys to key positions, but everyone doesn’t care and confidence is high. As for the Minutes of the FOMC Meeting, they demonstrated that the members of the FED no longer know what to think about the economy and the fall in rates. When we look at what was said behind the closed doors of the Federal Reserve, we clearly understood that they had not anticipated the arrival of Trump. And as before, they were sailing by sight AND in the fog, the election of Donald did not help matters. If we had to summarize things, we would say that before the Meeting they did not know what to do and that after the Meeting, it was worse. We understand better why Powell says that there is no urgency to lower rates, since he clearly no longer knows what to think and what to do.
As for quarterly publications, we will still note that last night Dell published its figures and that it was not good. Well, not good, that’s to say quickly. Revenues were below expectations but earnings per share were better than expected. Artificial intelligence is still Dell’s main lever, but it was not enough and the stock was down 10% after close. It should also be noted that the maritime transport sector is facing a global shortage of seafarers, which is fueling a worrying mix of false CVs and accidents at sea. As a result, the price of shipping is rising and it won’t necessarily help on the subject of inflation.
Today’s numbers
For this last day before turkey, we will take care of the American PCE figures, as well as the GDP and the Germans will publish the consumer climate figures. The US markets will be open normally today, but generally the day before Thanksgiving it is rather calm and as long as Trump does not communicate, it should remain that way. Currently futures are down 0.03% and remember that 75% of the time stocks go up on Thanksgiving. The American stock markets, nothing is less certain in Europe.
It remains for me to wish you an excellent day and we’ll see you tomorrow to talk about nothing much, have a very nice day everyone!
Thomas Veillet
Investir.ch
« The biggest risk of all is not taking one. » — Mellody Hobson
