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Pro Perspectives 11/21/24

 

 

 

 

 

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November 21, 2024

Nvidia put in a record high after earnings yesterday, and then the largest company in the world proceeded to whipsaw in an 8% range on the day (a $300 billion valuation swing).  
 
That said, much of big tech was down on the day.  
 
But value stocks were UP big
 
The broadening of strength across the stock market could have something to do with meetings Trump had yesterday at Mar-a-Lago. 
 
He had two Treasury Secretary candidates in for interviews: Kevin Warsh and Marc Rowen. 
 
Howard Lutnick, who's close to Trump, had been rumored to be the leading candidate since last week, especially after Elon Musk made the case for his candidacy on Twitter, saying this …
 
 
The investment community didn't like it …
 
 
Lutnick got the Secretary of Commerce position on Tuesday, where he will be the point man using tariffs as leverage to work toward more fair global trade — which is all about China manipulating its currency to undercut the world on exports (keeping the currency cheap). 
 
Kevin Warsh, who Trump interviewed for the Fed Chair job in his first term, bubbled up early this week as the top prospect.
 
But Warsh has a well-documented history of skepticism on the use of tariffs, which has been a key part of the Trump agenda.
 
As of early this morning, if we look at the betting markets, the race has swung clearly back in favor of Scott Bessent.  Perhaps no coincidence, markets behaved favorably today.
 
With a Treasury market vulnerable to a financial event, the dollar's world reserve status under threat, massive fiscal and trade imbalances, and a battle with China for global leadership, this Treasury Secretary decision is a big one.  And Trump has been prudently deliberate. 
 

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