Bitcoin
Trump attends Republican National Convention, Dow Jones record close, bitcoin ‘digital gold’
Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3, 2024.
Michael M. Santiago | Getty Images
This report is from today’s CNBC Daily Open, our newsletter covering international markets. The CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Dow record high
O Dow Jones Industrial Average closed at an all-time high after former President Donald Trump survived an assassination attempt. S&P 500 Index reached an intraday high and Nasdaq Composite rose 0.4%. The prospect of Trump’s reelection is seen as positive for small caps, Russell 2000 gained 1.8%, reaching its highest level since 2022 and recording a fourth consecutive positive day. The yield on the 10-year bond Treasury went up like investors analyzed comments by Federal Reserve Chairman Jerome Powell. US Oil Prices refused.
Trump praised at Republican National Convention
Former President Donald Trump was applauded and celebrated at the Republican National Convention in Milwaukee, his first appearance since an assassination attempt at a Pennsylvania rally. Sporting a bandage over his right ear, Trump appeared in good spirits. The crowd erupted in applause and chants of “Fight! Fight! Fight!” as he entered the arena and waved to the audience. Earlier, Trump chose Ohio Sen. J.D. Vance as his vice-presidential running mate for the 2024 election. Meanwhile, Elon Musk reportedly said he is planning promise about 45 million dollars per month to a newly formed super PAC supporting Trump.
The Fed may not wait
Powell said that central bank will not wait until inflation hits its 2% target to cut interest rates. Because of the delayed effects of monetary policy, “if you wait until inflation falls to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightening that you have, is still having effects that are likely to drive inflation below 2%,” Powell said.
Bitcoin ‘digital gold’
BlackRock CEO Larry Fink, initially a bitcoin skeptic, now sees cryptocurrency as “digital gold” and a potential safe haven for investors worried about political instability and rising government debt. Fink believes bitcoin can offer uncorrelated returns and act as a hedge against currency devaluation caused by excessive deficits. “I think it’s an instrument that you invest in when you’re most scared. It’s an instrument for when you think countries are devaluing their currencies because of excessive deficits, and some countries are,” Fink told CNBC’s “Scream in the street.”
Asian markets mixed, Nifty hits high
Asia-Pacific markets were mixed, with investors weighing Powell’s Moderated Comments and former President Donald Trump choice for vice-presidential running mateJD Vance, who has been critical of China. Hong Kong Hang Seng Index fell 1.37%, while mainland China’s CSI 300 rose 0.21%. India’s benchmark index Nifty 50 reached a historic record, Japan Nikkei 225 rose as markets resumed trading after a public holiday, and South Korea Kospi went up a little more. Australia S&P/ASX 200 Index fell marginally, pulling back from the index’s all-time closing high on Monday.
[PRO] ‘Super 8’
UBS has updated its “Super 8” list of top Asian tech stocksseen as alternatives to the US’s “Magnificent Seven.” These stocks are expected to outperform the rest of Asia next year due to strong earnings growth and attractive valuations compared to global technology peers.
Not only did Trump Media to see shares rise 30% after the assassination attempt on former President Donald Trump, cryptocurrency also gained a boost. This increase appears as a platform for political betting Predict suggests that Trump is likely to win the November election by a wide margin following the attempt on his life. The cryptocurrency connection? Trump recently raised $12 million at a fundraising event hosted by tech venture capitalists David Sacks and Chamath Palihapitiya, where he criticized Democrats’ attempts to regulate the cryptocurrency industry.
At this point, financial markets are broadly supportive of Trump’s deal.
“The market, I mean, will prefer Trump. He’s more pro-free market, anti-regulation, pro-growth,” said Wharton School finance professor Jeremy Siegel. CNBC’s “Squawk Box” on Monday.
But this growth comes at a price.
“About growth, if we have a red scan“I think it’s more likely that we’ll get more tax cuts — more than the 2017 tax cuts extended past their current expiration at the end of 2025. So that would certainly be a relative boon to growth, albeit with larger deficits,” Michael Feroli, chief U.S. economist at JPMorgan, told CNBC.
“The deficit is not on a good trajectory even with current policy, and if we extend all the tax cuts, which is likely to happen in any scenario but perhaps a little longer in a red wave, we are looking at a pretty distressing situation for issuance.”
Goldman Sachs suggests a Trump’s second term could sustain recent small-cap rally. O Russell 2000 gained 6% last week and 1.8% on Monday.
“The big wild card, on trade and immigration policy, there are a lot of unknowns, and if you go back to 2019, the first trade war, it had a chilling effect on business sentiment and maybe some of that can be offset by deregulation,” Feroli said. “We’re really heading into an environment of widespread uncertainty if you look at policy next year.”
Christopher Harvey, head of equity strategy at Wells Fargo Securities, told CNBC: “As the polls go up for Trump, you get a little bit more certainty, yes, we can argue about whether we’re going to have tariffs or not, but the likelihood of Trump has been good for the market. So that certainty is a little bit of a positive and that’s why you’ve seen the market go up.”
“Regulation is decreasing, who is that good for? That’s good for the banks, that’s good for capital markets, M&A, IPOs and that’s where I think you can make money in this market.”
— CNBC’s MacKenzie Sigalos, Alex Harring, Yun Li, Hugh Son, Sarah Min, April Roach, Jesse Pound, Charmaine Jacob, Rebecca Picciotto and Amala Balakrishner contributed to this report.