The US stock market (SPY) ended 2024 with a strong 24.5% calendar-year total return. By contrast, US bonds (BND) posted a tepid gain last year of just 1.1%.
Economists are generally wary of President-elect Trump’s plans to reshape the economy, according to a survey published by the Financial Times. “Surveys of more than 220 economists in the US, UK and Eurozone on the economic impact of Trump’s return to the White House showed most respondents believed his protectionist shift would overshadow the benefits of other elements of what the president-elect has dubbed “Maganomics”.
China’s manufacturing activity continued to expand in December but at a slower pace, according to a survey-based measure of the industry. The Caixin/S&P Global manufacturing PMI ticked down to 50.5 in December from 51.5 the previous month, inching closer to the neutral 50 mark.
Hedge fund billionaire Bill Ackman has said he expects Donald Trump to privatize two of the nation’s biggest government-owned mortgage lenders, Fannie Mae and Freddie Mac. “During Trump’s first term, Secretary Mnuchin took steps toward this outcome, but he ran out of time,” says Ackman. “I expect that in the second @realDonaldTrump administration, Trump and his team will get the job done.”
America isn’t prepared for the economic blowback that will occur if China invades Taiwan, warn two geopolitcal analysts. “If China forces a confrontation over Taiwan, which Beijing claims as its own territory, the United States will need to respond decisively: The implications are enormous, potentially including a global economic crisis far worse than the shock caused by the Covid-19 pandemic,” write Eyck Freymann, a Hoover fellow at Stanford University, and Hugo Bromley, a research fellow at the Center for Geopolitics at the University of Cambridge. “Right now, America isn’t ready.”
Eurozone manufacturing activity ended 2024 in contraction, according to PMI survey data. “New orders have dropped even more than in the previous two months, crushing any hopes for a quick recovery,” says Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “This view is backed by the accelerated decline in order backlogs.”
