Macro Mondays | Is the Trump Trade Unwinding? | 04|11|24

11/04/24 • 33 min

This episode of Macro Mondays was recorded at 4:30pm GMT on Friday, the 1st of November.

On today's episode, James Todd is joined by Research Analyst Will Cunliffe - as James Brodie is travelling - to dive into the latest macroeconomic developments shaping global markets. They discuss whether we're seeing an unwinding of the "Trump trade" as gold and the S&P 500 opened weaker on Thursday, 31st October.

We're seeing mixed data out of the US, with a mix of increased consumer confidence and disappointing non-farm payrolls. In the US, corporate spreads are also falling; ICE Bank of America high yield OAS spreads are the smallest they've been since 2005.

Gold saw its worst drop since July, and we're seeing mixed earnings among companies with Amazon and Tesla looking strong but Microsoft looking disappointing. Brent, meanwhile, rallied over Middle East concerns.

This episode of Macro Mondays was recorded at 4:30pm GMT on Friday, the 1st of November.

Previous Episode

The Officials with Jorge Montepeque: Sucker Time | S1 E14

In this episode of The Officials, Jorge dials into the studio from Beijing to join Harry, Ed, and Will. The team dive into key market developments over the past week, including movements in the Chinese economy and updates on Chinese demand forecasts. They also explore how people will be trading as we enter US election week - and what the risks are. Finally, they look at geopolitical risk, including the current situation between North Korea and South Korea.

Next Episode

Oil insights with Harry Tchilinguirian | Waiting for Uncle Sam | S1 E11

On this episode of Oil Insights, Group Head of Research, Harry Tchilinguirian and Research Associates Martha Dowding and Vincent Wu cover the potential implications of the 2024 U.S. Presidential election on the oil market, particularly focusing on foreign policy towards sanctioned countries like Iran, Venezuela, and Russia, as well as key Middle Eastern allies, like Israel and Saudi Arabia.

Looking at sanctions on Iran and Venezuela, for Iran, under Harris, the current containment and loose sanctions are likely to continue, allowing Iran to export around 1.5 million barrels per day (mb/d) of crude. Trump would likely tighten sanctions, potentially reducing Iran's exports, once again, below 500,000 barrels per day (kb/d). As for Venezuela, limited changes are expected under either administration. However, Trump might be more supportive of oil sector activities, possibly benefiting companies like Chevron operating in Venezuela.

For Russia and Ukraine, Harris is likely to continue the Biden administration’s stance of supporting Ukraine with military aid against Russia. Whilst Trump might be able to broker a solution with Russia, which could possibly lead to the lifting sanctions, allowing more Russian oil to enter global markets.

Harry, Martha and Vincent also discuss U.S. relations with Israel and Saudi Arabia. Whilst both parties support Israel, Trump is seen as having stronger influence over Israel and could broker regional peace talks more effectively.

And as for Saudi Arabia, Trump may have an easier path to re-establish relations and secure increased oil production, whereas Harris may adopt a critical stance.

As for U.S.-China Trade Policy, both candidates hold firm stances on trade with China, but Trump is expected to pursue more aggressive tariffs, which could lead to lower economic growth and thus, weaker global oil demand.

Finally, Harry, Martha and Vincent discuss domestic oil and gas policy. Trump is likely to reduce regulations, promote energy independence, and encourage oil infrastructure expansion, whilst Harris is expected to focus on energy transition policies, potentially slowing U.S. oil and gas production growth through regulatory constraints.

Overall, the episode suggests that the U.S. presidential outcome will have extensive repercussions for oil supply, international alliances, and the global energy market, with each candidate presenting sharply contrasting strategies.

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