Nick Goold
Latest Political News
Donald Trump emerged as the victor in the U.S. election, winning with a larger margin than anticipated. Securing 312 electoral votes, he easily surpassed the 270 needed and also won the popular vote, underscoring his strong performance. In response, the judge overseeing Trump’s 2020 election interference case cancelled all remaining court deadlines, while prosecutors evaluate “the appropriate course going forward” in light of Trump’s presidential victory. As attention shifts to the transfer of power, the focus now turns to how Trump will enact his policies in the coming term.
Volatility Index
VIX Last Week
Open: 21.01 High: 21.16 Low: 15.88 Close: 15.98
Summary
Trump’s unexpectedly decisive win brought calm to financial markets, resulting in the VIX plunging last week. The VIX had previously been pricing in the risk of a close result and potential disputes from either side, but the orderly transition of power has led traders to aggressively sell off the VIX. Although Trump still faces some legal challenges, the clear outcome has eased concerns, contributing to reduced market volatility.
VIX Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
The VIX has returned to a critical support level at 15. While the market outlook appears bearish, selling at these levels could be risky. Based on his previous term, a Trump presidency often brings increased volatility; therefore, if support holds at 15, buying the VIX may be the most effective short- to medium-term strategy.
Potential Impact of the Trump Presidency
With Trump’s clear majority victory, the VIX is expected to settle at lower levels as market confidence grows around continued business-friendly and market-stabilizing policies. However, anticipate periods of quick VIX spikes as new policies, especially those related to trade and international relations, are introduced.
Stock Indices
Dow Jones Index Last Week
Open: 41,980 High: 44,181 Low: 41,650 Close: 44,035
Nikkei 225 Last Week
Open 38,403 High 40,157 Low 38,144 Close 39,066
Summary
The Dow surged to record highs, spurred by Trump’s victory, marking the largest weekly rise in over a year. The decisive win boosted investor confidence, with expectations that equity markets may see substantial gains similar to those during Trump’s previous term. Analysts view Trump’s domestic growth policies and the likelihood of lighter regulation compared to the Biden administration as positives for the market. A Republican-controlled government raises the prospects for tax cuts and increased M&A activity, though concerns persist over a growing federal deficit and heightened tariffs, which could drive inflation fears. Meanwhile, the Nikkei recorded only a modest rise compared to the Dow, as resistance held firm at 40,000, and concerns over potential future interest rate hikes in Japan weighed on the market.
Dow Weekly Chart
Nikkei 225 Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
While the medium-term outlook for the Dow remains positive, the market appears somewhat overextended in the short term. Technical indicators suggest overbought conditions, but it may be best to wait for signs of a downturn and a daily chart pullback before considering selling. The Nikkei, meanwhile, remains confined to a 37,000 to 40,000 range, making selling opportunities within this range the most favourable strategy for the week.
Potential Impact of the Trump Presidency
A Trump win is expected to benefit the Dow, with the market anticipating tax cuts and deregulation. However, Trump’s ‘America First’ policies and potential tariff increases could pose challenges. This outcome may be less favorable for the Nikkei, as Trump could push for a stronger yen to support U.S. exports, which may hurt Japanese exporters and place downward pressure on the index.
Energy
Oil (WTI) Last Week
Open: 70.84 High: 73.04 Low: 69.95 Close: 70.61
Summary
WTI saw a relatively quiet week as traders shifted their focus to other markets following Trump’s election win. A stronger USD prompted speculative selling, yet ongoing unrest in the Middle East, with Israel striking Gaza and Lebanon, kept support levels holding just below.
Oil (WTI) Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
The $67 to $72.50 range is expected to hold this week as traders take a wait-and-see approach, watching how Trump will address the ongoing unrest in the Middle East. However, with the USD strengthening on expectations of potentially higher inflation under a Trump presidency, the market looks more likely to test support levels.
Potential Impact of the Trump Presidency
The Trump victory is expected to boost US oil production, potentially putting downward pressure on prices as supply rises. Additionally, Trump’s efforts to end unrest in the Middle East could further soften prices if successful. A strong USD under his presidency could also weaken WTI prices.
Crypto
Bitcoin Last Week
Open: 69,194 High: 77,152 Low: 66,781 Close: 76,338
Summary
The impact of Trump’s victory was immediate, propelling Bitcoin past $80,000 to new record highs. Trump has vowed to make America the “crypto capital of the world,” with a high-level team filled with strong crypto advocates. His administration has made significant gestures toward Bitcoin, even entertaining the idea of a strategic national Bitcoin reserve.
Bitcoin Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
Given Bitcoin’s highly speculative nature, predicting the end of this rally is challenging. Key resistance levels to watch are $80,000, $90,000, and $100,000. While the market appears overbought in the short term, following the upward momentum remains the best strategy for now.
Potential Impact of the Trump Presidency
A Trump victory is clearly bullish for Bitcoin, as Trump and his team are openly crypto-friendly. This supportive stance could drive Bitcoin toward $100,000 or higher in a favourable policy environment.
Upcoming Political & Economic Events
With the election now behind us, the market’s focus shifts back to U.S. economic data and assessing how Trump’s policies may influence inflation and future interest rate changes. This week brings key inflation reports, with CPI on Wednesday and PPI on Thursday. Additionally, Federal Reserve Chairman Powell’s remarks on Thursday could add to market volatility.
Potential Market Impact
With the election now behind us, volatility is expected to stay high as markets assess the implications of a Trump presidency. The VIX has returned to a key support at 15, and while the market appears bearish, selling at these levels could be risky. A Trump presidency historically brings higher volatility; if support holds, buying the VIX may be an effective short- to medium-term strategy. The Dow’s medium-term outlook remains positive, though overbought indicators suggest waiting for a pullback before selling. The Nikkei is still range-bound between 37,000 and 40,000, with range trading the most favourable approach this week.
WTI is likely to stay within the $67 to $72.50 range, with traders watching for Trump’s approach to Middle East unrest. The strengthening USD could lead to a test of support. For Bitcoin, resistance at $80,000, $90,000, and $100,000 will be crucial levels. Despite short-term overbought conditions, following the upward momentum remains the best strategy for now.
This Week's Trump Trades
Trump’s presidency is expected to introduce key policy changes aimed at promoting U.S. businesses, focusing on two major measures emphasised throughout his campaign: reducing the corporate tax rate from 21% to 15% for companies producing in the U.S. and imposing tariffs on imports to protect domestic industries. Here are three markets to monitor closely as they respond to Trump’s win.
Tesla Inc. (TSLA)
Tesla has surged over 30% since Trump’s win, as the market anticipates more favourable electric vehicle policies due to the close relationship between Trump and CEO Elon Musk. In the short term, the market appears overbought, but selling could be risky. Given the strong uptrend, waiting for a pullback to previous resistance around $250 to $270 might offer the best entry. Trump has also voiced support for the U.S. auto industry and may end the $7,500 tax credit for EV purchases, which could further impact Tesla’s valuation. With a history of rewarding loyalty, Trump’s policies could make Tesla an unexpected winner.
Tesla Daily Chart
Bitcoin
Bitcoin has already hit record highs following Trump’s election victory, buoyed by his vision to make America the “crypto capital of the world.” Long-term prospects for Bitcoin appear positive, with potential regulatory easing on digital assets likely to fuel continued interest. Ideal buy points include a return to previous resistance around $73,500 or a breakout above $81,000. Given Bitcoin’s volatility, it’s best to use a tight stop-loss with an aim for larger gains, as short-term timing can be challenging.
Bitcoin Daily Chart
S&P 500
The broader S&P 500 stands to benefit from a Trump presidency, potentially even more than the Dow, given its larger proportion of small-cap stocks. The S&P 500 has outperformed the Dow, rising 26% this year compared to the Dow’s 16%, highlighting market strength. Buying at current high levels could be risky for short-term traders, so waiting for a small reversal seems to be the best strategy, with a potential buy level around the previous highs at 5,900.
S&P 500 Daily Chart
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