The race for Trump's Treasury Secretary has evolved into a dynamic contest, with Apollo Global Management CEO Marc Rowan and former Federal Reserve Governor Kevin Warsh joining as new contenders alongside frontrunners Scott Bessent and Howard Lutnick. Investor Kyle Bass and others are backing Bessent for his comprehensive understanding of bond markets and global financial flows, while figures like Elon Musk and RFK Jr. have thrown their support behind Lutnick to aggravate change instead of continuing the current economic legacy. The stakes are particularly high as Trump's ambitious trade agenda, centred on tariffs, creates tension with Wall Street's desire for market stability. Bessent has recently reinforced his commitment to implementing tariffs, addressing concerns about his stance on Trump's trade policies, while Lutnick is reportedly being considered for other economic roles, including Commerce Secretary. The expanded search comes after billionaire John Paulson's withdrawal, citing "complex financial obligations." The final decision will be closely monitored, as it could indicate the direction of policies that must balance embracing Trump's protectionist approach with preserving the market stability that characterised his previous administration's economic success.
EQUITY
Wall Street saw gains, although slight, with investors eyeballs on Nvidia's Wednesday earnings that could give insights on the future power of this year's AI-driven rally. Tesla jumped 5.6% following reports that President-elect Trump's team might ease self-driving car regulations, while Super Micro Computer led gains with a 16% jump after compliance hopes. Energy stocks also cheered as crude oil prices climbed. Major retailers, including Walmart, Target, and Lowe's, are on deck to report earnings this week, promising insights into consumer spending habits as the holiday shopping season approaches.
GOLD
Gold delivered a dramatic comeback on Monday, bouncing 2% off a six-day losing streak that had pushed the precious metal to two-month lows. Goldman Sachs injected fresh optimism into the market with a bold prediction that gold could reach $3,000 by December 2025, citing increased central bank demand, interest rate cuts, and geopolitical tensions. While gold remains 6.4% below its October 30 record high of $2,788.50, market attention has shifted to Chicago Fed president Austan Goolsbee suggesting rates will be "a lot lower" over the next 12-18 months.
OIL
WTI held their ground near $69 per barrel on Tuesday following Monday's 3.2% rally, mainly due to dual supply disruptions at Norway's Johan Sverdrup field and Kazakhstan's Tengiz operation. Another factor in play is the Biden administration's pivotal policy shift allowing Ukraine to deploy U.S.-made long-range missiles against Russian targets. Supply concerns escalated as Norway's Equinor grappled with a power outage that halted production at Western Europe's largest oilfield, while Kazakhstan's Chevron-operated Tengiz field reported a 30% production cut due to maintenance.
CURRENCY
The dollar paused its rally on profit-taking, which lifted the yen to 153.30 per dollar. Seasonal trends and debate over Fed rate cuts may challenge the dollar’s 2% monthly gain. The yen steadied after Bank of Japan Governor Ueda maintained a neutral stance, while Finance Minister Kato’s comments raised speculation of intervention. The euro rebounded to $1.06 as growth concerns overtook inflation fears in Europe. Analysts suggest short-term dollar weakness, but Trump's trade and tax policies could sustain long-term strength.
