Crypto Surge Fuels Market Optimism Amid Shifting Policies

Nov 12, 2024 at 8:29 AM
The financial markets have been on a rollercoaster ride in the aftermath of the US presidential election, with investors closely watching the potential policies of the incoming Trump administration. While US stock futures dipped marginally on Tuesday, the overall sentiment remains bullish, driven by expectations of tax cuts and looser regulations under the new administration. The cryptocurrency market, in particular, has seen a remarkable surge, with the global market value topping $3 trillion for the first time in three years.

Navigating the Post-Election Landscape: Opportunities and Challenges

### Stocks Extend Rally, Crypto Reaches New HeightsThe main averages on Wall Street rose in the prior session, extending a rally initially sparked by the victory of Donald Trump in the US presidential election last week. Traders are betting that Trump will roll out deep tax cuts and install looser regulations during his second four-year term in the White House. This optimism has been reflected in the performance of various sectors, with shares in Tesla, whose CEO Elon Musk has been an outspoken advocate for Trump, surging, and banking stocks like Goldman Sachs and JPMorgan Chase also gaining.The cryptocurrency market has also been a beneficiary of the post-election optimism. Bitcoin, the world's most popular cryptocurrency, touched a new record high, fueled by expectations that Trump will take a light touch approach to regulation of the crypto industry. The value of the global cryptocurrency market topped $3 trillion for the first time in three years, a testament to the growing mainstream acceptance and adoption of digital assets.### Earnings Season ContinuesThe quarterly corporate earnings season is beginning to ebb, although several firms are still due to unveil their latest results. On Tuesday, DIY retailer Home Depot is set to report, with observers keen to see if more customers are choosing to spend on big-ticket home improvement projects after reining in such spending due to recent cost-of-living pressures.Canadian e-commerce services group Shopify will also release its third-quarter returns. In the previous quarter, the company, which helps small- and medium-sized businesses construct their online stores, gave an upbeat sales outlook thanks to demand for its artificial intelligence-enhanced tools. Meanwhile, Spotify is tipped to post its numbers after the closing bell. The Swedish audio streaming giant, which has slashed headcount and reduced its marketing budget this year in a bid to corral expenses, delivered profit that just topped projections in the second quarter.### SoftBank Swings to Profit Amid Tech Valuations RecoveryJapanese technology conglomerate SoftBank Group Corp. clocked a stronger-than-expected quarterly profit on Tuesday, aided by the successful listing of some of its portfolio stocks and resilience in the yen. SoftBank's net profit surged to 1.18 trillion yen ($7.7 billion) in the three months to Sept. 30, much more than estimates of 287 billion yen. Billionaire entrepreneur Masayoshi Son's tech investment titan benefited from a recovery in valuations in its portfolio firms, as the value of its holdings in high-growth tech startups had been heavily dented by recently elevated interest rates.Softbank's flagship Vision Fund logged a 608.48 billion yen gain on investments in the September quarter, thanks in part to strength at Chinese ride hailing giant Didi and South Korean e-commerce group Coupang. This turnaround in the company's fortunes underscores the resilience of the tech sector and the potential for savvy investors to capitalize on market shifts.### Oil Prices Stabilize After Recent WeaknessOil prices steadied after recent weakness on Tuesday, following disappointment over the latest stimulus plan from top importer China. By 03:25 ET, the Brent contract climbed 0.3% to $72.03 per barrel, while US crude futures (WTI) traded 0.3% higher at $68.22 a barrel. Both contracts had fallen by more than 5% over the previous two trading sessions, as the Chinese stimulus package was seen as providing little direct support to the economy.In the US, tropical storm Rafael was seen largely dissipating in the Gulf of Mexico, soothing fears of supply disruptions in the region. This stability in the oil market, coupled with the broader optimism in the financial markets, suggests that investors are cautiously optimistic about the economic outlook, despite the ongoing challenges and uncertainties.