⚡ Will Bitcoin and Treasury Yields Define 2025 Strategies?
Macro Mornings // #MarketTrends #PolicyImpact #GlobalEconomy
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Market Volatility
Trump Trade’s Mixed Impact: The S&P 500 is up 23.08% YTD, exceeding the 18.5% YTD gain in 2023, though it fell 2.1% this week, with sector rotations reflecting policy uncertainties.
Bitcoin’s Rapid Growth: Bitcoin surged 32.46% since the election, its sharpest post-election rally since 2016, driven by expectations of looser cryptocurrency regulations.
EV Market Adjustments: Tesla rose 42.63% post-election before retreating following the confirmed removal of the $7,500 EV tax credit, which hit Rivian hardest with a 14.3% weekly decline.
Global Economy
Eurozone Recovery: Q3 GDP grew 0.4% QoQ, its strongest quarterly performance in 2024, but Germany’s economy is forecasted to contract by 0.1%, reflecting regional disparities.
Japan’s Currency Weakness: The yen depreciated to JPY 155/USD, its lowest in over a year, compared to an average of JPY 135/USD in 2023, as U.S. rate policies apply pressure.
China’s Deflation Concerns: October’s PPI fell 2.9% YoY, marking the deepest decline since late 2022, while core inflation remains subdued at 0.2%, highlighting ongoing deflationary risks.
Policy Directions and Investment Trends
Treasury Yields on the Rise: The 10-year U.S. Treasury yield reached 4.51%, its highest level since June, compared to 1.5% in late 2020, reflecting evolving Fed expectations.
Fed Policy and Futures Pricing: Odds for a full percentage point rate cut by late 2025 fell to 32.6%, down from 41.3% last week, signaling tempered expectations for aggressive easing.
Energy and Infrastructure Opportunities: With deregulation and infrastructure development likely in focus, these sectors could see significant growth, echoing trends from Trump’s first term.
Alessandro
Founder of Macro Mornings
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.