This week in charts: Elon Musk breaks new records

by InvestEngine

This week we turn our attention to the United States. In a week where CPI inflation ticked up to 2.7% and president Xi received his invitation to the inauguration, we take a look at the expectation for rate cuts by the Federal Reserve, as inflation remains stickier than expected and some of the Trump effects are already priced in by markets. Over in Europe, the ECB has also cut rates by a further 25bps to 3.00% (as expected).


Source: Bloomberg


US stocks reach double GDP

All time highs in the US appear to be a weekly occurrence at present. As US CPI sends big tech to fresh highs, we’ve once again reached a point where the US market is worth over two times its nominal GDP.

The rise of equal-weight ETFs has offered an alternative for investors looking for another avenue away from magnificent 7 concentration. However, at this point in time, this comes at the expense of investment performance, as market-weighted US stock indices continue to rally.

As the presidential inauguration nears there are concerns that Trump’s stimuli, tax cuts and tariffs could lead to inflation, but the current gains market gains make a good case for strong nominal growth.

Resolving US inflation may lead to uncertainty over the next few months, which could be impactful for the global economy. It might yet force a change in the Trump 2.0 plans for tax cuts and tariffs.


Source: Bloomberg

Elon Musk breaks new ground

As one of Donald Trump’s new best pals, Elon Musk has seen his ownership in Tesla increase by 72% since November 2024. A further re-evaluation of his SpaceX venture via an insider deal has propelled the valuation to $350 million, making him the richest individual in the world.

Musk’s net worth currently sits at $470 billion dollars after a single day gain of $63 billion, eclipsing Jeff Bezos’ net worth by almost $200 billion.

Polymarket has since launched a series of bets around when Musk will reach the trillion dollar mark.


Source: Bloomberg

The Fed due to cut rates throughout 2025

It could be argued that the Federal Reserve doesn’t need to cut rates any further, given how resilient the US economy has been to interest rate changes so far. However, both the government and the Federal Reserve run separate mandates where one should not influence the other. The threat of Trump-fueled inflation remains and markets continue to price further cuts. At present, we are expected to have a 25bps cut come December’s meetings.


Source: Bloomberg

A keen eye on Donald Trump’s tariff plans

As the Trump tariff threat continues to play its part with some of the US’ trading partners, the responsiveness in their domestic markets has been somewhat muted at present. China is off by almost 5% but, given the volatility investors have come to expect from the regions, this is not out of character.

President-elect Donald Trump plans tariffs on China, Mexico, and Canada upon taking office in January 2025, nominally to address drug smuggling and illegal immigration. A 25% tariff targets Mexico and Canada, with a 10% additional tariff on China until fentanyl smuggling stops. Critics warn of higher consumer costs, trade tensions, and supply chain disruptions.


Source: Bloomberg

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