Markets jump as Trump enthusiasm continues

Dow shot up 333, advancers over decliners better than 3-2 but NAZ inched up only 3.  The MLP index stayed in the 288s & the REIT index added 2 to 430.  Junk bond funds hardly budged & Treasuries were flattish, leaving yields pretty much unchanged.  Oil declined 2+ to 68 & gold plummeted 72 to 2622.

Dow Jones Industrials

General Motors (GM) is proving it’s a standout among automakers this year as it continues to consistently outperform earnings expectations & its competitors.  GM has done so with the assistance of $12.4B in stock buybacks since last Nov, which the automaker said will continue for the foreseeable future.  But it's also proving itself to be operationally better than its rivals.  CEO & Chair Mary Barra has touted that kind of differentiation for years, but it has largely fallen upon deaf ears.  GM, unlike many competitors, has not lowered its 2024 guidance or underperformed quarterly earnings expectations.  Instead, it's actually raised key financial targets despite facing ongoing market challenges in the US & its Chinese operations losing hundreds of Ms of $s amid increased competition.  While GM has said it’s cutting costs, it has not had to be as aggressive as other automakers this year.  Others are conducting massive business restructurings that include layoffs, production cuts & other cost-saving measures.  Barra, when discussing quarterly earnings Oct 22, reiterated her stance that GM will continue to “build on our competitive strength and deliver the performance that differentiates us from others in the industry.”  “We’re going to be disciplined and we’ll be resilient, and we’ll make adjustments to the extent that we can to continue to drive growth and profitability,” Barra said.  “In the weeks and months ahead, you’ll see more clearly than ever how we intend to leverage the tailwinds that are within our control to deliver strong results in 2025 that are in a similar range to 2024.”  GM stock went up 1.70.

GM’s Wall Street vindication is happening as it outperforms its peers in 2024

Pres-elect Donald Trump's immigration plan will be a "cost savings" for the American people, former acting ICE Director Tom Homan said, responding to a warning that carrying out the largest mass deportation effort in history could bear a hefty price tag.  "[The Biden administration] is paying for free airline tickets around the country, free hotel rooms at $500 bucks a night, free education, free medical care, and that's in perpetuity," he said.  "President Trump's plan over time is going to save the taxpayers money… They're [the Biden administration] paying $500 bucks a night for hotel rooms in New York City. Meanwhile, there's empty ICE beds at $127 a night, so President Trump's plans will save taxpayers money over time."  Homan & other top voices on the immigration issue have been critical of the Biden-Harris administration over the last 4 years, as illegal migrants have crossed in record numbers & strained resources in communities across the US.  Under their tenure, areas like New York City, Boston & Chicago have become hotbeds for migrants.  In New York City, for instance, the once-iconic Roosevelt Hotel became synonymous with the 2nd Ellis Island, as it transitioned into a migrant processing hub & housed illegal immigrants to the brim.  Trump made immigration an issue integral to his campaign, reemphasizing his push for a border wall & mass deportation as he urged during his previous campaigns.  It is believed Trump's plan, which could involve an emergency declaration over the border, wall construction & deportation.  A critical near-term priority is finding the money to pay for it.  An estimate by the American Immigration Council, a liberal immigration group, estimated that an operation to deport the total number of people living in the US illegally could cost $968B over more than a decade, or roughly $88B a year.  Any deportation effort requires enormous resources to hire more federal agents to identify & arrest immigrants, contract out space to detain them & procure airplanes to fly them to other countries.

Trump’s plan for key election issue that’s expected to save money in American pockets

Donald Trump's election win has left Europe scrabbling to work out how it will be able to contain or counter highly probable tariffs on its exports to the US once the pres-elect enters the White House.  Ahead of his decisive election win last week, Trump had already threatened to revive a trade war that began during his first term in office, stating in his election campaign that he would raise tariffs on Chinese goods by 60-100% & would impose a blanket 10-20% tariff on all US imports.  Trump sees the protectionist move as a way to boost US jobs & growth, but the policy would undoubtedly open up a new front in trade tensions with 2 of the country's largest trading partners, the EU & China.  Critics of the proposed tariffs say the policy could lead to higher prices for US consumers.  While Trump has a reputation for unpredictability, meaning his rhetoric sometimes fails to materialize in terms of policy, analysts agree that the pres-elect appears undeterred when it comes to trade tariffs, having opined on how the term itself is “the most beautiful word in the dictionary.”  That leaves Asia & Europe having to quickly consider ways to mitigate the future impact of export tariffs, & whether to retaliate or to try to negotiate a get-out deal . Economists caution that it’s uncertain whether Trump's tariffs on Europe will be “as damaging as feared,” as ING economists stated in a note Fri, or whether they will simply be “a bargaining chip designed to unlock wider foreign policy deals.”  Nonetheless, there have been calls in Europe for the bloc to prepare retaliatory measures now, with the director of Germany's Ifo Center for Intl Economics calling on Germany, which relies heavily on trade with the US, particularly in terms of vehicle exports, & the EU to “strengthen their position through measures of their own.”  “These include deeper integration of the EU services market and credible retaliatory measures against the U.S.,” Ifo's Lisandra Flach said last week.  The proposed measures include the potential use of the EU's new “Anti-Coercion Instrument” that gives the gives the region a wide range of possible countermeasures when, it says, “a country refuses to remove the coercion.” The countermeasures include the imposition of tariffs, restrictions on trade in services & trade-related aspects of intellectual property rights & restrictions on access to foreign direct investment & public procurement.  Germany & the EU could also strengthen cooperation with individual US states, Flach suggested.

Europe could try to stop — or get around — damaging Trump tariffs`

The Dow surged to build on the roaring post-election rally, but NAZ struggled as the "Trump trade" took the spotlight in markets.  Markets opened with stocks at all-time highs thanks in large part to expectations for lower corp taxes & deregulation from Pres-elect Trump.  The Federal Reserve's latest interest rate cut also buoyed the mood.  However the advance decline ratio has not been impressive as many stocks are not participating in the rally.