Author: Daniel Chang

A senior trade adviser to President-elect Donald Trump has expressed concern over reports that China may allow its currency, the yuan, to weaken. Peter Navarro, the incoming senior counselor for trade and manufacturing, indicated that the new administration would view such actions unfavorably, especially given China’s past reputation as a currency manipulator. In an interview, Navarro emphasized that while the White House would respect the Treasury Department’s biannual review on currency practices, the Trump administration would not tolerate any perceived attempts by China to manipulate its currency. “The history of China as a currency manipulator is well-known,” Navarro stated, hinting…

Analysts at Bank of America are highlighting the possibility of a brief decline in the S&P 500, even as the index typically benefits from strong seasonal performance in December and the potential for a rally toward the 6180 range. The bank emphasized that the overall trend for the S&P 500 remains positive, anchored by key support levels between 6025 and 5985. However, they pointed to signals from Demark indicators that suggest a near-term pullback could be on the horizon. “Daily Demark signals, including a ‘9’ on December 4 and a ’13’ on December 5, indicate potential exhaustion in the S&P…

The U.S. dollar gained ground on Tuesday as investors anticipated inflation data that could provide insights into the Federal Reserve’s future monetary policy. Meanwhile, the Australian dollar fell sharply following weaker Chinese trade figures and a softer inflation outlook from the Reserve Bank of Australia (RBA). After initially rallying on promises of stimulus from China, the Australian dollar’s momentum faded, dropping 0.93% to $0.6381, its lowest level since August. The currency had risen 0.8% the previous day but lost steam after China’s trade data revealed slowing export growth and a surprising contraction in imports, dampening optimism for the Australian economy,…

In a recent report, Barclays analysts explored how equity markets have performed historically during periods of unified Republican control of the U.S. government. This political alignment, often termed a “Red Sweep,” occurs when the GOP controls the presidency, along with majorities in both the House and Senate. Barclays’ analysis revealed that such scenarios have been rare, with only four instances since 1949. Despite the limited sample size, these periods have tended to yield stronger equity market performance compared to situations where Republicans held only the presidency while Congress was divided. The report highlights that the S&P 500 delivered median returns…

The Russian rouble rebounded on Friday, trading at 99.50 against the U.S. dollar, following a decree by President Vladimir Putin that introduced new options for European buyers of Russian gas to make payments. The move has allowed foreign currency flows to resume, providing a much-needed boost to the currency. According to data from banks, the rouble gained 1.5% against the dollar and 2.4% against China’s yuan, trading at 13.57 on the Moscow stock exchange. The decree permits European gas buyers, such as Hungary and Slovakia, to convert their currencies into roubles using banks outside the scope of sanctions, bypassing restrictions…

UBS has highlighted that the S&P 500’s price to earnings (P/E) ratio is currently 22.2x, which is significantly above its 30 year average. While this may raise concerns about overvaluation, UBS argues that the elevated level is supported by solid fundamentals rather than speculative exuberance. One major factor is the S&P 500’s changing composition. Technology companies now represent 40% of the index’s market capitalization, compared to just 10% three decades ago. These companies are outperforming others in key areas, such as sales growth and profitability. With average sales growth at 10.5% compared to 5.7% for non tech firms, and a…

The U.S. dollar edged slightly higher in cautious trading on Monday as investors awaited key U.S. inflation data scheduled for release this week. Meanwhile, the Australian and New Zealand dollars rose after China announced plans to adopt a more accommodative monetary policy next year to support economic growth. Market expectations for a quarter point interest rate cut by the Federal Reserve at its upcoming meeting remain strong, particularly following a recent uptick in the U.S. unemployment rate to 4.2%. Despite a surge in job growth in November, the higher unemployment rate signals a cooling labor market, which could give the…

UBS has lowered its forecasts for the USD/JPY exchange rate, projecting it to reach 145 by the end of both 2025 and 2026. This marks a significant adjustment from the bank’s previous estimates of 157 and 161, respectively. The revision reflects growing optimism about the Bank of Japan’s ability to implement further rate hikes. UBS economists anticipate a 25-basis-point hike during the central bank’s policy meeting on December 19, a move that has boosted the yen’s performance against the dollar. “Increased confidence in the BOJ’s capacity to raise rates further has been the main factor driving this shift,” UBS analysts…

Federal Reserve Chair Jerome Powell emphasized a measured approach to interest rate reductions, citing the robust state of the U.S. economy. Speaking at the New York Times DealBook Summit, Powell highlighted the central bank’s ability to proceed cautiously in aligning rates with a neutral level that neither stimulates nor slows economic growth. “We have the capacity to take a more cautious approach as we work to identify the neutral rate,” Powell said during his interview with Andrew Ross Sorkin on Wednesday. Powell attributed the Fed’s cautious stance to stronger-than-expected economic growth, a solid labor market, and slightly elevated inflation. “The…

Bank of America has increased its price target for Tesla (NASDAQ: TSLA) shares from $350 to $400, citing greater confidence in the company’s growth prospects following a recent visit to Tesla’s Giga Texas factory in Austin.During the visit, which included meetings with Tesla’s investor relations team, factory tours, and test drives, analysts observed key developments that support Tesla’s long-term growth strategy.“The visit strengthened our confidence in Tesla’s ability to expand its core electric vehicle (EV) business, roll out new vehicles to broaden its market reach, and launch its robotaxi program by 2025. Additionally, its Optimus robotics initiative appears to be…