As President-elect Donald Trump gears up for his inauguration as the 47th President of the United States on Monday, financial markets and economic analysts are closely monitoring developments. The inauguration, coinciding with Martin Luther King Jr. Day, means U.S. markets will be closed, delaying immediate market reactions. However, the anticipation of Trump's aggressive policy rollout, including close to 100 executive orders on day one, is already stirring economic speculations and discussions worldwide.
A spotlight on energy prices has emerged as a pivotal factor in driving down inflation expectations, potentially allowing the Federal Reserve to lower interest rates more swiftly. Trump's comments about "unlocking liquid gold under their feet" have fueled optimism, suggesting potential energy policy shifts that could stabilize prices. As inflation remains a primary concern for traders, these developments are expected to influence market sentiment significantly.
The upcoming week promises crucial economic indicators. The job report, due on Tuesday, along with the Purchasing Managers' Index (PMI) releases on Friday, will be critical in providing insights into economic health and guiding market expectations. Meanwhile, U.K. stocks stand to gain from a predicted decline in average earnings, which may bolster their market position amidst global economic fluctuations.
The current state of commodities reflects an air of cautious steadiness. Gold's price remains unchanged, trading flat at approximately $2,700 on Monday. In contrast, West Texas Intermediate (WTI) crude oil has seen a 4% decline since its peak last Wednesday. These movements suggest a measured response from commodity markets as they await further clarity on policy directions and economic data releases.
In the stock market arena, the FTSE 100 has made an encouraging start to the week, approaching record highs. This positive momentum is partly attributed to the broader economic outlook and potential benefits stemming from Trump's anticipated policy decisions. President-elect Trump's constructive discussions with Chinese President Xi Jinping point towards a possibly less confrontational stance on tariffs, offering hope for improved international trade relations.
Over the weekend, Trump captured headlines with his decision to capitalize on Trump and Melania meme coins, sparking criticism and debate. While Trump's team views this move as a strategic financial venture, critics argue that it may detract from more pressing economic priorities.