Asian Stocks Rise Amid Optimism for Economic Stimulus and Expectations of Trump’s Second Term

Asian stocks saw a significant rise, following positive momentum from U.S. markets,
as investors bet that Trump’s second term could support global economic growth
and prompt the Federal Reserve to cut interest rates.

Contents:

Stocks
Currencies
Comments

Stocks:

Chinese Markets Lead the Gains
Chinese companies led this rise, with stocks posting major gains due to growing optimism that the Chinese government may announce more stimulus packages to support the economy.
This optimism was reflected in the “CSI 300” index, which reversed early Thursday losses of 1% to post gains,
despite concerns over the potential impact of U.S. tariffs on Chinese goods.

U.S. Markets Surge
In the United States, stocks made historic gains, with the “S&P 500” rising 2.5%, marking its best post-election day performance ever, while the “Nasdaq 100” jumped 2.7%. This rally was fueled by expectations that the Federal Reserve might cut interest rates by a quarter point in its upcoming meeting.
Analysts attribute this rise to optimism that Trump’s policies aimed at reducing taxes and easing regulations could boost corporate profits, making financial markets more attractive to investors.

Impact of U.S. Monetary Policy
U.S. 10-year Treasury yields climbed by 16 basis points, driven by expectations that Trump’s fiscal policies, including tariff hikes, could spur inflation, reducing the Federal Reserve’s ability to effectively lower interest rates in the future.

Currencies:

Volatility in Currency and Commodity Markets
In Japan, the yen rose after comments from Atsushi Mimura, head of the Japanese currency division, who indicated the government’s readiness to take measures against excessive currency movements. This rise came after the yen had dropped by 2% following Trump’s election win.
Meanwhile, China’s central bank lowered the yuan exchange rate to its lowest level since the end of 2023, reflecting a policy shift allowing the currency to weaken amid a strong U.S. dollar.

Outlook for U.S. Interest Rates
It is widely expected that the Federal Reserve will cut interest rates by a quarter point in today’s meeting, with a potential additional cut in December. Projections for 2025 suggest a series of further rate reductions, according to forecasts announced in September.

Comments:

Expert Opinions and Analyses
Young Yu Ma of “BMO Wealth Management” commented, “Another rate cut in December seems likely,
and as we look ahead to 2025, we anticipate further cuts, possibly two or three,
depending on political conditions and economic growth.”
At the same time, central banks around the world are closely monitoring the potential effects of Trump’s economic policies,
amid growing concerns about his return to the presidency and its impact on global markets.

Decline in Fear Index and Digital Markets
The “VIX” fear index dropped sharply on Wednesday, signaling reduced concerns on Wall Street,
as trading volumes soared, reaching 19 billion shares—63% above the average daily trading volume over the past three months.
In digital markets, Bitcoin fell on Thursday morning after hitting a record high the previous day,
while oil prices stabilized and gold declined for a second consecutive day following a period of high volatility.

Asian Stocks Rise Amid Optimism for Economic Stimulus

Asian Stocks Rise Amid Optimism for Economic Stimulus

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