USD slumped, stocks surged on moderate Trump 2.0 optimism

·       Gold also jumped early Tuesday as Trump raised doubt about the sustainability of the phased Gaza war ceasefire

·       EM stocks are under stress as Trump threatened 25% tariffs on Mexico and Canada for illegal immigrants and Fentanyl push

·       Trump also reiterated 100% tariffs on BRICS countries if they try to replace the USD with an alternative currency

·       Overall, despite sounding less hawkish on Chinese tariffs, Trump is adding various suspense over trade policies & tariffs, and immigration, making the Fed’s job harder

·       China savvy US Tech titans led by Musk & Co will ensure less hawkish Trump 2.0 policy on China

On Friday (17th Jan’24), Wall Street Futures surged on hopes of a less hawkish Trump 2.0 tantrum after incoming US President Trump called Chinese President Xi and had a friendly talk. Trump Truthed: “I just spoke to Chairman Xi Jinping of China. The call was a very good one for both China and the U.S.A. I expect that we will solve many problems together, and start immediately. We discussed balancing Trade, Fentanyl, TikTok, and many other subjects. President Xi and I will do everything possible to make the World more peaceful and safe!”

It’s now almost clear that contrary to general market expectations, Trump 2.0 would be less hawkish compared to Trump 1.0 bellicose policies, especially trade, teaching, and cold war against arch-rival/competitor China and even Russia, amid the growing influence of Tesla/Twitter/SpaceX CEO Musk. The world’s richest Billionaire Musk has good relations and business interests with China. Musk has reportedly also been in close contact with Russian President Putin since the start of the Ukraine war and also has a big business plan in Russia with Star Link satellite-based broadband. Thus it’s expected for his business interest or any larger ‘conspiracy’ by China & Russia, Musk & Co will ensure a moderate Trump 2.0 tantrum.

And in any way, whatever the narrative, a less war-savvy and practical Trump 2.0 regime may be more dovish than his often bellicose comments from trade/tariffs, immigration/deportations, and even techs. Thus Trump 2.0 may be less hawkish than expected and thus heavy US MNCs and techs got some boost. Trump was running far behind Harris in approval rating after the 1st debate, but all changed drastically after the ‘heinous shooting’ incidences on Trump ‘twice’ and subsequent sudden support of influential Musk & Co for Trump to ‘protect free speech & democracy’ in the US.

Anyway, moderate Musk may ensure good relations between the US and China/Russia not only for his business interests but also for the overall interest of the US economy in this age of globalization. The US and China, being the two largest economies in the world, need to maintain good diplomatic and trading relations for not only the prosperity of each other but also for the whole world.

On Friday and also Monday, Wall Street and European indices, especially export-heavy German Dax 40 also surged on less hawkish Trump 2.0 optimism and an imminent start of the Gaza war ceasefire & hostage deal from Sunday (19th Jan 25). On Thursday (16th Jan 25), after days of suspense, Israel and Hamas finally agreed to the Gaza war ceasefire and hostage deal, marking a significant step toward peace after 15 months of hostilities. The Israeli security cabinet approved the deal on 17th January, with the full cabinet's endorsement anticipated shortly by Saturday. Israel and Hamas reached a ceasefire agreement, mediated by Qatar and the US, after 15 months of conflict. Europe and many other EM economies like India stand to gain from Gaza and a high potential Ukraine war ceasefire and also a less hawkish Trump trade war tantrum 2.0.

On Sunday, in a dramatic turn of events, the Chinese short video (reel) app TikTok resumed operations in the US after a 12-hour blackout amid Trump’s assurance that he will issue an executive order on his 1st day at the White House. The debate over banning TikTok in the U.S. has been a recurring political/cold war issue under both the Trump and Biden administrations, largely driven by concerns over national security, data privacy, and TikTok's Chinese ownership (via ByteDance).

Trump Administration (2016–2020)

Executive Orders and Ban Attempt: In 2020, Trump issued executive orders attempting to ban TikTok unless ByteDance sold its U.S. operations to a US company amid national security concerns that the Chinese government could access U.S. user data or influence public opinion through the app; Proposed buyers included Oracle and Walmart, but a final deal never materialized.

Legal Challenges: TikTok and users challenged the ban in U.S. courts, leading to injunctions that blocked the ban from taking effect. The ban was stalled, and the Trump administration’s legal efforts ended without a resolution.

Biden Administration (Jan’21-25):

Reevaluation of TikTok: In 2021, Joe Biden revoked Trump’s executive orders but directed the Commerce Department to review apps linked to foreign adversaries, including TikTok. The Biden admin expressed similar concerns about data privacy and potential Chinese government access but aimed to pursue a more comprehensive approach.

Committee on Foreign Investment in the United States (CFIUS): Biden’s administration leaned heavily on CFIUS to negotiate with ByteDance, pushing for stricter data security measures. TikTok proposed the “Project Texas” plan to store U.S. data on Oracle servers to address national security concerns.

Congressional Pressure: Bipartisan lawmakers have repeatedly called for tougher action on TikTok, with some introducing legislation to ban it outright. In March 2023, TikTok's CEO testified before Congress, facing intense scrutiny over the app’s data practices and ties to ByteDance.

As of now, TikTok remains a contentious issue. While the Biden administration hasn’t banned the app outright, the political climate suggests growing bipartisan momentum to either restrict or heavily regulate TikTok due to concerns about so-called Chinese influence. On January 19, 2025, TikTok was officially banned in the US following a Supreme Court ruling that upheld a law requiring its Chinese parent company, ByteDance, to divest from the app or face a complete shutdown. This law raised significant concerns about national security and data privacy, as it was believed that the Chinese government could access sensitive information from American users.

The court unanimously supported the divest-or-ban law, stating it did not infringe upon TikTok's free speech rights. Consequently, TikTok voluntarily shut down its services in the U.S. on January 19, impacting approximately 170 million users. The outgoing Biden administration indicated that enforcement of the law would be left to the incoming Trump administration. White House officials dismissed TikTok's last-minute appeals as unnecessary, suggesting the company should address its concerns with Trump.

Trump changed their stance in his 2nd term:

On 19th Jan’25, just before taking office on January 20, 2025, President-elect Donald Trump, in an interview indicated plans to issue an executive order aimed at temporarily reinstating TikTok. He expressed his intention to extend the compliance deadline for ByteDance to divest its ownership and allow TikTok to seek a U.S. partner for shared ownership. During a rally, Trump proclaimed, "As of today, TikTok is back," attributing his electoral success among younger voters to the platform.

Anyway, following Trump's announcement, TikTok began restoring its services just hours before the anticipated enforcement of the ban. The app's management expressed gratitude for ‘President’ Trump's intervention and clarified that they were in the process of complying with the new directives.

But despite Trump's efforts, some Republican lawmakers criticized his announcement, arguing there was no legal basis for extending the ban without ByteDance severing ties with China. They urged compliance with existing laws designed to protect national security. The situation surrounding TikTok highlights ongoing tensions between data privacy concerns and political maneuvering in the U.S. But Trump 2.0 changed its earlier hard stance on TikTok, realizing that the US requires policy certainty (predictability). Trump may have also realized the popularity of TikTok among younger US voters, who also voted this time quite significantly in favor of Trump.

Musk & Co may have also convinced Trump to change his earlier hawkish stance on China as it’s not only the 2nd largest consumption market for the US MNCs, but also the largest and vital supply chain for the US and the whole world. That’s why Trump first called the Chinese President Xi and invited him for his inauguration. Trump also is open to having a meaningful dialog with Putin regarding the Ukraine war ceasefire, while Putin also congratulated President Trump and expressed confidence he will eventually avoid any potential WW-III.

On Sunday (19th Jan 25), Chinese Vice President Han Zheng met with Tesla CEO and Trump’s top advisor Musk and other representatives of the American business community in Washington. Han, who is in Washington to attend US President-elect Donald Trump's inauguration on behalf of Chinese President Xi Jinping, told Musk that China "welcomes US companies, including Tesla, to seize the opportunity to share the fruits of China's development and make new and greater contributions to the promotion of China-US economic and trade relations." Musk replied by saying that Tesla was willing "to deepen its investment and cooperation with China and play an active role in promoting US-China economic and trade exchanges”.

On Sunday, Musk, the CEO of the social media platform X, said the situation in which China's app TikTok is allowed access to the market in the US while X is banned in China is "unbalanced." He came out against a ban on TikTok in the US but said that "something needs to change" in China's attitude to foreign social media.

On Monday, a Chinese Foreign Ministry spokesperson stressed that tech companies operating in China must comply with relevant domestic legislation and "provide safe and reliable products and services." Mao said China welcomes foreign firms but that the Chinese government "manages the internet following the law." China banned Twitter and other foreign social media platforms in 2009, long before Musk acquired the company in 2022.

On early Monday, Wall Street Futures surged, while USD slumped on hopes of a less hawkish Trump trade war 2.0 after a WSJ report Trump was not expected to introduce tariffs the first day in office. However, Trump may direct Federal agencies to review existing trade policies and assess the nation's trade relationships with China, Mexico, and Canada. Federal agencies will also be tasked with assessing the viability of an External Revenue Service, a new federal body announced by Trump to ‘collect billions of tariffs revenue from every foreign countries’ exporting to the US.

The WSJ also indicated that among the anticipated actions of the 47th President are declaring a national emergency at the US-Mexico (southern) border, rolling back Biden administration policies on diversity, equity, and inclusion, and overturning restrictions on offshore and federal land drilling imposed by President Biden.

On Monday (20th Jan 24), Trump said in his maiden address as the 4th US President and after making the greatest political comeback in modern US history:

·       The golden age of America begins right now. From this day forward, our country will flourish and be respected again all over the world

·       America’s decline is over from the last four years of radical and corrupt establishment

·       My recent election is a mandate to completely reverse a horrible betrayal and all of these many betrayals that have taken place and to give the people back their faith, their wealth, their democracy, and indeed their freedom.

·       From this moment on, America’s decline is over.

·       We’ll measure our success by the wars we end and the wars we never get into

·       My proudest legacy will be that of a peacemaker and unifier

·       I’m pleased to say that, as of yesterday, one day before I assumed office, the hostages in the Middle East are coming back home to their families

·       Like in 2017, we will again build the strongest military the world has ever seen. We will measure our success not only by the battles we win, but also by the wars that we end, and perhaps most importantly, the wars we never get into

·       Our power will stop all wars; my proudest legacy will be as a peacemaker

·       We will take back the Panama Canal from the control of China

·       American ships are being over-charged at the Panama Canal

·       We will establish a Department of government efficiency

·       We will establish an external revenue service

·       I will tariff and tax foreign countries to enrich our citizens

·       It will be massive amounts of money pouring into our treasury coming from foreign sources

·       I will begin an overhaul of the trade system

·       I will revoke the EV mandate

·       I will fill strategic reserves again and export American energy all over the world.

·       We will produce more oil & gas

·       We will drill, baby--drill baby drill

·       We will withdraw from the Paris climate accord

·       I will also declare a national energy and inflation (high cost of living) emergency today.

·       I will direct the cabinet to defeat record inflation

·       I will sign a series of executive orders today

·       I direct US agencies to take emergency measures to reduce the cost of living.

·       Will send troops to the southern border

·       We will launch astronauts to Mars

·       We will expand US territory

Relevant Full text of US President Trump's second inaugural address ON 20th Jan’25:

“The golden age of America begins right now. From this day forward, our country will flourish and be respected again all over the world. We will be the envy of every nation, and we will not allow ourselves to be taken advantage of any longer during every single day of the Trump administration. I will very simply put America first and our sovereignty will be reclaimed. Our safety will be restored. The scales of justice will be rebalanced. The vicious, violent, and unfair weaponization of the Justice Department and our government will end our top priority will be to create a nation that is proud prosperous, and free.

America will soon be greater, stronger, and far more exceptional than ever before. I return to the presidency, confident and optimistic that we are at the start of a thrilling new era of national success, a tide of change is sweeping the country. Sunlight is pouring over the entire world, and America has the chance to seize this opportunity like never before, but first, we must be honest about the challenges we face while they are plentiful, they will be annihilated by this great momentum that the world is now witnessing in the United States of America, as we gather today, our government confronts a crisis of trust.

For years, a radical and corrupt establishment has extracted power and wealth from our citizens while the pillars of our society lay broken and seemingly incomplete disrepair. We now have a government that cannot manage even a simple crisis at home, while at the same time stumbling into a continuing catalog of catastrophic events abroad. It fails to protect our magnificent law-abiding American citizens but provides sanctuary and protection for dangerous criminals, many from prisons and mental institutions that have illegally entered our country from all over the world.

We have a government that has given unlimited funding to the defense of foreign borders, but refuses to defend American borders, or, more importantly, its people, our country can no longer deliver basic services in times of emergency, as recently shown by the wonderful people of North Carolina been treated so badly and other states who are still suffering from a hurricane that took place many months ago or more recently, Los Angeles, where we're watching fires still tragically burn from weeks ago without even a token of defense.

They're raging through the houses and communities even affecting some of the wealthiest and most powerful individuals in our country, some of whom are sitting here right now. They don't have a home any longer. That's interesting. We can't let this happen. Everyone is unable to do anything about it. That's going to change.

We have a public health system that does not deliver in times of disaster, yet more money is spent on it than any country anywhere in the world, and we have an education system that teaches our children to be ashamed of themselves, in many cases, to hate our country despite the love that we try so desperately to provide to them. All of this will change starting today, and it will change very quickly.

My recent election is a mandate to completely reverse a horrible betrayal, and all of these many betrayals that have taken place and to give the people back their faith, their wealth, their democracy, and indeed, their freedom. From this moment on, America's decline is over. Our liberties and our nation's glorious destiny will no longer be denied, and we will immediately restore the integrity, competency and loyalty of America's government.

Over the past eight years, I have been tested and challenged more than any president in our 250-year history, and I've learned a lot along the way. The journey to reclaim our republic has not been an easy one that I can tell you. Those who wish to stop our cause have tried to take my freedom and indeed, to take my life. Just a few months ago, in a beautiful Pennsylvania field, an assassin's bullet ripped through my ear, but I felt then and believe even more so now that my life was saved for a reason, I was saved by God to make America great again.

That is why, each day, under our administration of American patriots, we will be working to meet every crisis with dignity power, and strength. We will move with purpose and speed to bring back hope, prosperity, safety and peace for citizens of every race, religion, color and creed. For American citizens, January 20, 2025, is Liberation Day.

I hope that our recent presidential election will be remembered as the greatest and most consequential election in the history of our country. As our victory showed, the entire nation is rapidly unifying behind our agenda, with dramatic increases in support from virtually every element of our society, young and old, men and women, African Americans, Hispanic Americans, Asian Americans, urban, suburban, rural and very importantly, we had a powerful win in all seven swing states and The popular vote.

We won by millions of people to the black and Hispanic communities, I want to thank you for the tremendous outpouring of love and trust that you have shown me with your vote. We set records, and I will not forget it. I've heard your voices in the campaign, and I look forward to working with you in the years to come. Today is Martin Luther King Day, and his honor, this will be a great honor, but in his honor, we will strive together to make his dream a reality. We will make his dream come true for food.

National Unity is now returning to America, and confidence and pride are soaring like never before in everything we do. My administration will be inspired by a strong pursuit of excellence and unrelenting success. We will not forget our country. We will not forget our Constitution, and we will not forget our God.

Today I will sign a series of historic executive orders. With these actions, we will begin the complete restoration of America and the revolution of common sense. It's all about common sense. First, I will declare a national Emergency at our southern border. All illegal entry will immediately be halted, and we will begin the process of returning millions and millions of criminal aliens to the places from which they came. We will reinstate my remaining Mexico policy.

I will end the practice of catch and release, and I will send troops to the southern border to repel the disastrous invasion of our country. Under the orders I signed today, we will also be designating the cartels as foreign terrorist organizations, and by invoking the Alien Enemies Act of 1798 I will direct our government to use the full and immense power of federal and state law enforcement to eliminate the presence of all foreign gangs and criminal networks bringing devastating crime to US soil, including our cities and inner cities.

As Commander in Chief, I have no higher responsibility than to defend our country from threats and invasions, and that is exactly what I am going to do. We will do it at a level that nobody has ever seen before. Next, I will direct all members of my Cabinet to Marshall the vast powers at their disposal to defeat what was record inflation and rapidly bring down costs and prices. The inflation crisis was caused by massive overspending and escalating energy prices, and that is why today I will also declare a national energy emergency. We will drill, baby, drill.

America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have, the largest amount of oil and gas of any country on Earth, and we are going to use it. We will bring prices down, fill our strategic reserves up again, right to the top, and export American energy all over the world. We will be a rich nation again, and it is that liquid gold under our feet that will help to do it. With my actions today, we will end the Green New Deal, and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers.

In other words, you'll be able to buy the car of your choice. We will build automobiles in America again at a rate that nobody could have dreamt possible just a few years ago. And thank you to the auto workers of our nation for your inspiring vote of confidence; we did tremendously with their vote. I will immediately begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.

For this purpose, we are establishing the external revenue service to collect all tariffs, duties, and revenues; it will be massive amounts of money pouring into our treasury coming from foreign sources. The American dream will soon be back and thriving like never before to restore competence and effectiveness to our federal government. My administration will establish a brand new Department of Government efficiency after years and years of illegal and unconstitutional federal efforts to restrict free expression. I will also sign an executive order to immediately stop all government censorship and bring back free speech to America.

Never again will the immense power of the state be weaponized to persecute political opponents, something I know something about. We will not allow that to happen. It will not happen again. Under my leadership, we will restore fair, equal, and impartial justice under the constitutional rule of law, and we are going to bring law and order back to our cities. This week, I will also end the government policy of trying to socially engineer race and gender into every aspect of public and private lights. We will forge a society that is colorblind and merit-based.

As of today, it will henceforth be the official policy of the United States government that there are only two genders, male and female. This week, I will reinstate any service members who were unjustly expelled from our military for objecting to the COVID vaccine mandate with full back pay.

And I will sign an order to stop our warriors from being subjected to radical political theories and social experiments while on duty. It's going to end immediately. How will armed forces be free to focus on their sole mission, defeating America's enemies? You like in 2017 will again build the strongest military the world has ever seen, we will measure our success, not only by the battles we win, but also by the wars that we end, and Perhaps most importantly, the wars we never get into.

My proudest legacy will be that of a peacemaker and unifier. That's what I want to be, a peacemaker and a unifier. I'm pleased to say that as of yesterday, one day before I assumed office, the hostages in the Middle East are coming back home to their families. Thank you. America will reclaim its rightful place as the greatest, most powerful, most respected nation on earth, inspiring the awe and admiration of the entire world.

A short time from now, we are going to be changing the name of the of Mexico to the Gulf of America, and we will restore the name of a great president, William McKinley, to Mount. McKinley where it should be and where it belongs. President McKinley made our country very rich through tariffs and through talent.

He was a natural businessman and gave Teddy Roosevelt the money for many of the great things he did, including the Panama Canal, which has foolishly been given to the country of Panama after the United States, the United States. I mean, think of this, spent more money than ever spent on a project before and lost 38,000 lives in the building of the Panama Canal. We have been treated very badly for this foolish gift that should have never been made, and Panama's promise to us has been broken.

The purpose of our deal and the spirit of our treaty have been violated. American ships are being severely overcharged and not treated fairly in any way, shape, or form, and that includes the United States Navy. And above all, China is operating the Panama Canal. And we didn't give it to China. We gave it to Panama, and we're taking it back.

We will stand bravely, we will live proudly, we will dream boldly, and nothing will stand in our way, because we are Americans. The future is ours, and our Golden Age has just begun. Thank you. God. Bless America. Thank you all.”

On January 20, 2025, Trump was sworn in as the 47th President of the US, marking his return to the White House. In his inaugural address, he outlined several key initiatives and signed multiple executive orders to set the tone for his administration. Overall, Trump’s inaugural speech was characterized by grand promises and a strong critique of previous administrations, reflecting familiar themes from his first term. Trump also outlined a series of ambitious policy proposals, resembling a State of the Union address (SOTU) more than an inaugural one.

Trump’s Inaugural Address Highlights:

·       Declaration of a "Golden Age": President Trump proclaimed the beginning of a "golden age" for America, emphasizing national unity and a resurgence of confidence and pride. Trump opened with a bold declaration that "the golden age of America begins right now," promising to restore national pride and prosperity. He emphasized his commitment to putting "America first" in all policies and actions during his administration.

·       Critique of Past Presidents: Without naming former President Biden, Trump criticized past administrations for their failures, particularly in handling domestic and global crises. He portrayed himself as a savior figure poised to reverse the nation's decline and restore its greatness.

·       Immigration and Border Security: He announced a national emergency at the southern border, vowing to halt illegal immigration and reinstate policies such as "Remain in Mexico." He also pledged to deploy troops to secure the border and to repel what he termed an "invasion" of migrants” and designate drug cartels as foreign terrorist organizations.

·       Energy Policies: Trump declared a national energy emergency, aiming to boost domestic energy production by increasing oil and gas drilling and revoking clean energy initiatives, including the electric vehicle mandate. Trump pledged to declare a national energy emergency, advocating for increased drilling and energy production. His slogan was "Drill, baby, drill"---

·       Trade Overhaul: Trump introduced plans to overhaul the trade system to protect American workers, including imposing tariffs on imports and establishing an "External Revenue Service" to manage these duties. Trump promised to collect tariffs/import duties from exporters rather than the usual norms from importers; i.e. China, Mexico, Canada, and all other exporting nations will pay Uncle Sam Trump tariffs rather than US importers. Trump reiterated plans to impose tariffs on foreign nations to benefit American workers.

·       Inflation Act: Trump vowed to combat inflation through executive actions such as lower fiscal deficit/debt and lower fuel/energy costs.

·       Social Policies: Trump stated that the federal government would recognize only two genders, male and female, and announced the termination of diversity, equity, and inclusion programs within the federal government (no social Quota type system in Federal employment)

·       Space Exploration: Trump expressed ambitions to launch American astronauts to Mars, signaling a renewed focus on space exploration.

Executive Actions:

In conjunction with his speech, Trump indicated that he would sign several executive orders aimed at addressing immigration, energy production, and trade issues immediately after taking office.

Withdrawal from various erstwhile International Agreements: On his first day, President Trump signed executive orders withdrawing the United States from the Paris Climate Accord and the World Health Organization (WHO)

·       Presidential Pardons: He issued pardons for individuals involved in the January 6 (2021) Capitol Hill attack during Biden's inauguration; Trump didn’t attend, while VP Pence had to do all necessary protocols for ‘peaceful transfer of power)

·       Federal Workforce Policies: Trump implemented a hiring freeze for federal civilian workers (excluding the military) and demanded that federal employees return to in-person work; i.e. no WFH/Remote

·       TikTok Ban Suspension: As promised, Trump signed an order halting the ban on TikTok for 75 days, urging for U.S. ownership of half the company (50% stake sale to some US entity)

·       Declaring a national emergency regarding immigration

·       Implementing strict measures against undocumented immigrants

·       Promoting energy extraction from domestic resources[

Trump’s post-inauguration address comments:

·       I'm not confident that the Gaza ceasefire will hold through all three phases-- Hamas is very weak right now-- They didn't exactly run it well

·       In addition to his comments on the ceasefire, Trump highlighted Gaza's potential for redevelopment, noting its "phenomenal location" along the Mediterranean Sea and favorable climate. When asked about U.S. involvement in Gaza's reconstruction, he responded, "I might”.

·       To revoke 80 Biden executive actions: Trump described these actions as "destructive and radical" and emphasized his commitment to getting rid of them. Trump criticized the Biden administration, calling it "maybe the worst" administration in the nation's history. He also promised to implement an immediate freeze on federal regulations to stop Biden administration officials from issuing new regulations, to "stop Biden bureaucrats from continuing to regulate."

·       EU should buy our oil, gas or face tariffs: The European Union charges us ... they have a VAT [Value Added Tax] of 20%, but it's much higher than that ... and that's almost the equivalent of a tariff--the US has around a $300 billion deficit with the EU. We'll strengthen that out with either tariff or they have to buy our oil and gas.

·       The US would probably stop buying oil from Venezuela.

·       I could travel to China this year.

·       Thinking in terms of 25% tariffs on Mexico, and Canada on Feb. 1 for exporting immigrants and Fentanyl: My administration is thinking in terms of imposing 25% tariffs on goods coming from Mexico and Canada. I think we'll do it on February 1st; levies would be imposed because Mexico and Canada are allowing vast numbers of people and fentanyl to come in.

·       Putin would be well-off to end war: Putin would be well-off to end the war in Ukraine--he is not doing too well--Russia lost one million troops--- I have to speak to President Putin, we're gonna have to find out--- Russia's bigger, they have more soldiers to lose but that's no way to run a country---Zelensky wants to make a deal. I don't know if Putin does. He should make a deal. I think he's destroying Russia by not making a deal.

·       Speaking about the possibility of lifting sanctions on Russia, Trump noted he prefers tariffs to sanctions.

·       Trump on enemies: We have a lot of them: When asked if President Biden had warned him about a specific threat, as former President Barack Obama had once identified North Korea as a major concern, Trump said Biden did not. However, he added, "We have a lot of them"

·       Reflecting on his past tenure, Trump noted improved relations with North Korea: North Korea turned out to be good--I think Kim must be happy to see I'm coming back—

·       Trump also humorously mentioned the NK's potential, mentioning its extensive shoreline and real estate opportunities.

·       Trump to block hiring of new IRS agents

·       Trump reportedly to reverse Biden's freeze on bomb shipments to Israel

·       Trump demands NATO 'equalize' Ukraine spending

·       Trump halts US foreign aid programs for 90 days

·       Trump revokes Biden's removal of Cuba from terror sponsors list

·       Trump could sell the majority of federal govt office spaces: Trump's transition team said the offices will be sold to the private sector if the president authorizes the plan. Meanwhile, GSA said that it continues to work to right-size the federal portfolio, and is committed to optimizing space in federal buildings. Trump has already developed some of GSA's buildings, including transforming the Old Post Office in Washington into a Trump Hotel and turning the Mar-a-Lago property in Florida into a resort and his residence.

Market Impact: Stocks surged; USD slumped and Gold also booted

Wall Street Futures surged Friday on moderate Trump 2.0 optimism, but Gold got some boost Tuesday as Trump said he ‘not confident’ Gaza hostage-ceasefire deal will hold through all three phases. These statements come amid a backdrop of significant policy shifts. On his first day back in office, President Trump lifted sanctions imposed by the previous administration on Israeli settlers involved in violent activities in the West Bank. This move signals a strong pro-Israel stance and has raised concerns about potential escalations in the region. The ceasefire's fragility is further underscored by recent events. An Israeli military operation in the West Bank city of Jenin resulted in six deaths and numerous injuries, even as the truce in Gaza entered its third day. Such incidents highlight the complex and volatile nature of the situation, casting doubt on the ceasefire's sustainability. Trump also suggested that if the reconstruction plan proceeds effectively, Gaza could transform into a more prosperous area given its favorable location and climate.

Trump said: "I'm not confident" that the agreement will hold through all three planned phases---the situation in Gaza is like a massive demolition site000the conflict is primarily a matter for those directly involved--That's not our war; it's their war.”

Conclusions:

Although Trump sounded less hawkish on tariffs, his suspense and the intention to use them as a deal-making weapon may add more uncertainty together with immigration policies, which may affect inflation and the labor market and Fed’s task more difficult. Fed may be on hold in Q1CY25 to see & assess actual Trump policies.

Bottom line:

Trump can’t convert the US into a major manufacturing hub replacing China by simply putting additional tariffs or threats; he has to develop China like industrial and logistical infra along with competitive input costs to replace China. This may not be possible by Trump in his life time or even in the next 50 years. Without adding supply capacity to the economy, Trump also may not bring down prices meaningfully by simply declaring an economic/inflation emergency, restricting public deficit, and lowering oil/fuel/energy prices.  

Weekly-Technical trading levels: DJ-30, NQ-100, SPX-500, and Gold

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 42200) now has to sustain over 41800-41600 for any recovery and rally to 43000/43350-43800/45500 in the coming days; otherwise sustaining below 41600, DJ-30 may further fall to 41200/40600-40400/40000 in the coming days.

Similarly, NQ-100 Future (20990) has to sustain over 20700-21000 for recovery and rally to 21500/21900-22250/222500 and further 22700-23000/23300 in the coming days; otherwise, sustaining below 20700, NQ-100 may further fall to 20500/20300-20100/19250 in the coming days.

Technically, SPX-500 (CMP: 5865), now has to sustain over 5950 for any further recovery/rally to 6025/6050-6150/6200 and 6350/6500 in the coming days; otherwise, sustaining below 5925-5900, SPX-500 may further fall to 5800-5775 and 5700/5600-5475 in the coming days.

Also, technically Gold (CMP: 2690) has to sustain over 2705 for a further rally to 2725 and further 2740/2750-2775/2795 and 2815 in the coming days; otherwise sustaining below 2700-2685 may again fall to 2655/2620-2605/2600 and 2595/2575-2535/2435 in the coming days (depending upon Fed rate cuts, Gaza/Ukraine war trajectory); Gold surged almost 75% in the last one year since Gaza war started back in October’23. Now it may retrace to $2500-2400 levels if Trump indeed can mediate both the Gaza and Ukraine war ceasefire by early 2025.