Stocks gain, Bitcoin soars as the world waits for Trump: markets wrap up

(Bloomberg) — European stocks rose slightly, as did U.S. stock futures, while the dollar weakened ahead of Donald Trump's inauguration. Bitcoin hit a record high.

Trump is expected to issue a series of executive orders on his first day in office, including executive orders on immigration, tariffs and energy, as part of a broad effort to quickly implement his policy agenda upon inauguration in function. Although many investors expect these interventions to be business-friendly, they also introduce a note of unpredictability.

One thing is 100% certain: Trump wants to maintain good humor in the US stock markets, said Dana Malas, strategist at SEB. There will be strong policy focused on growth and business (for the US), with inflationary elements, and abrupt changes will be expected under the premise that deals are there to be broken.

Even before he takes office, Trump is already changing the markets. His conversation with Chinese leader Xi Jinping, which he called very good, boosted Asian stocks on Monday. And Bitcoin jumped 5.5% after the president-elect and his wife Melania unveiled their own memecoins over the weekend.

The Stoxx Europe 600 index gained around 0.1% at the opening, led by technology stocks. Futures contracts as well as the S&P 500 and Nasdaq 100 posted modest gains as Wall Street was closed Monday for a holiday. The dollar gauge slipped for the first time in three days, although it remains near the 13-month high reached earlier this month.

Among Trump's range of planned actions is a move to invoke emergency powers as part of his plan to unleash domestic energy production while seeking to undo President Joe Biden's actions to combat climate change , according to people familiar with the matter. Crude oil remained stable, while energy stocks fell in Europe.

Trump's combination of pro-growth and protectionist policies has prompted analysts to predict a less dovish Federal Reserve, a strengthening dollar and bond weakness. On the one hand, Nomura Holdings Inc. joined T. Rowe Price in seeing a chance that 10-year Treasury yields could rise to 6% this year, while a small group of bond traders believe that the next move by the American central banks in terms of interest rates will be to increase them, contrary to the majority opinion according to which rates will be reduced.

The increased appetite for risk assets in Asia came after Trump and Xi discussed trade, TikTok and fentanyl, which could set the tone for relations in the first days of the new administration. Adding to the more positive vibe, TikTok began restoring service in the United States on Sunday, as Trump said he would cease enforcement of a law requiring the app's Chinese owner to find a buyer for three months.

Whether this momentum continues depends on how quickly Trump implements his policies ranging from lower taxes to higher tariffs and tighter immigration controls, the inflationary impact of which could hold down the dollar strong and Treasury yields high. Its stance on issues such as technological rivalry with China and climate change will also likely affect investment decisions in sectors ranging from semiconductors to electric vehicles and shipbuilding.

What sets the tone for us in Asia is that Trump himself said he had a very good phone call with President Xi Jinping, said Heng Koon How, head of markets strategy at United Overseas Bank , on Bloomberg TV. Hopefully this sets a much more constructive tone between the United States and China.

Separately, Chinese Vice President Han Zheng met with billionaire Elon Musk and other U.S. business figures, highlighting Beijing's efforts to set a positive tone for relations with the United States ahead of Trump's return to the power.

The annual meeting of the World Economic Forum will begin later Monday. Among the group of billionaires expected to join the pilgrimage of the rich and powerful to Davos, Switzerland are Larry Fink, Ray Dalio and Marc Benioff. Trump will address the assembly virtually three days after his inauguration.

Later in the week, attention will now shift to the Bank of Japan's planned policy decision on Friday, with around three-quarters of economists surveyed by Bloomberg expecting it to raise its key rate.

Key events this week:

• Annual World Economic Forum in Davos begins Monday
• Donald Trump will be sworn in as the 47th President of the United States on Monday
• Jobless claims in the United Kingdom, unemployment, Tuesday
• Canadian CPI, Tuesday
• New Zealand CPI, Wednesday
• CPI in Malaysia, rate decision, Wednesday
• Retail sales in South Africa, CPI, Wednesday
• ECB President Christine Lagarde and other officials speak in Davos on Wednesday.
• South Korea's GDP on Thursday
• Euro zone consumer confidence, Thursday
• Turkey rate decision on Thursday
• Norway rate decision on Thursday
• Retail sales in Canada, Thursday
• Trump to join World Economic Forum for online dialogue
• CPI in Japan, rate decision, Friday
• India, Eurozone, UK PMIs, Friday
• ECB President Christine Lagarde and BlackRock CEO Larry Fink speak in Davos on Friday.

Some of the main market movements:

Actions

• The Stoxx Europe 600 rose 0.1% at 8:25 a.m. London time
• S&P 500 futures little changed
• Nasdaq 100 futures rose 0.1%
• Dow Jones Industrial Average futures little changed
• The MSCI Asia-Pacific index rose 1%
• The MSCI Emerging Markets Index rose 0.9%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.4% to $1.0310
• The Japanese yen was little changed at 156.16 per dollar
• The offshore yuan rose 0.2% to 7.3273 per dollar.
• The British pound rose 0.3% to $1.2201.

Cryptocurrencies

• Bitcoin rose 4.3% to $108,031.14
• Ether rose 5.3% to $3,402.2

Bonds

• The yield on 10-year Treasury bills changed little at 4.63%
• The German 10-year yield was little changed at 2.53%
• The UK 10-year yield was little changed at 4.66%

Raw materials

• Brent crude fell 0.1% to $80.67 a barrel
• Spot gold little changed

This story was produced with the help of Bloomberg Automation.

–With help from Matthew Burgess.

(An earlier version of this article corrected a reference to Fed forecasts in the ninth paragraph.)

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