Global Markets Kickstart: Policy Fuels Financials
Policy Fuels Financials
Chart of the Week:
Funds Remain Resilient, Bitcoin Still Favored
Despite year-end redemptions, funds are returning to Bitcoin, signaling strong investor confidence. The approval of Bitcoin spot ETFs by the SEC on January 10 provided regulated market access, boosting global investment. Trump’s support, including plans for a national Bitcoin reserve and eased regulations, further lifted sentiment, attracting investors.
Market Recap:
Light Trading Over New Year, Market Sees Minor Fluctuations
As the New Year approaches, investors adopted a cautious stance, locking in profits from 2024 ’s strong equity performance, leading to declines across the four major U.S. indices. European stocks saw a slight rebound but continue to lag behind U.S. markets due to weak economic performance and unresolved political uncertainties.
What’s Trending:
U.S. Manufacturing Activity Influences Equities, Recovery Could Provide Market Support
The U.S. manufacturing PMI for December dropped to 49.4, signaling weak manufacturing activity. The focus now shifts to President Trump’s potential policies, like tax cuts and tariffs, which could boost domestic demand and help revitalize manufacturing.
In Focus:
Eased Regulations and Spread Support Favor Financial Stocks for Further Gains
As 2025 begins, Trump’s return to the White House and his policies on tax cuts and fiscal deficits are influencing U.S. Treasury yields. The widening yield curve is notably impacting financial stocks. With around 60% of regional and large banks locking in higher fixed rates through loans and bond reinvestments, and bank loan growth showing signs of recovery, future earnings are expected to benefit.
