Equities are looking higher so far, as are US Treasuries and the dollar. Crude oil, gold, and silver are pulling back in the early going.
It’s been a good week for the stock market, with the S&P 500 on track for its best weekly performance since the post-election rally in November. Fueling the gains are renewed hopes for an extra Federal Reserve rate cut or two in 2025, along with strong earnings in the financial sector and some optimism about tech sector profits.
SPY, QQQ, DIA (5-Day % Return)
Data by YCharts
That said, we’re seeing a flurry of activity on the global and domestic fronts ahead of Donald Trump’s Monday inauguration. Countries from China to Canada are preparing for possible new tariffs or tariff hikes by enacting or discussing retaliatory steps, while the outgoing Biden Administration has pushed several last-minute measures in industries like shipbuilding and semiconductors to box in China.
The Supreme Court is also set to announce a decision on the law Congress previously passed to ban TikTok in the US due to national security and spying concerns. Lobbyists for the popular social media platform are swarming Washington to get the ban delayed or possibly reversed.
Trump has signaled he may sign an executive order that prevents TikTok (owned by the Chinese firm ByteDance) from going dark after he takes office Monday. But if TikTok is shut down or its US operations are hampered, other platforms like Meta Platforms Inc.’s (META) Instagram and Alphabet Inc.’s (GOOGL) YouTube stand to benefit.
Meanwhile, keep an eye on the global mining and commodities space. Bloomberg reported that Rio Tinto Plc (RIO) and Glencore Plc (GLNCY) held merger talks recently, which is a big deal because they have mining operations all over the world and are currently valued at $104 billion and $56 billion, respectively.
While the talks are said to be over, we’ve seen a wave of dealmaking in the sector already. Other combinations could ultimately come down the pike, too. For its part, the iShares MSCI Global Metals & Mining Producers ETF (PICK) is down more than 12% in the last year due to weakness in the Chinese economy. China was formerly a huge consumer of commodities of all kinds thanks to its construction and infrastructure boom.