Investors have already started cheering for Trump’s election and it has nothing to do with politics. The market reaction has been swift, steep and definitive, with the Dow posting its best day since 2022.

Today's edition unpacks the state of markets and the economy that Trump is preparing to receive.

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A laundry list of good and bad

Plenty of questions remain around what Donald Trump will bring to the Resolute desk for his second stint in the Oval Office.

Yet few are discussing what he’s about to inherit from Joe Biden’s administration. 

Items that come to mind: 

• Record-high stock market

• Record-high bitcoin

• Record-high gold

• Record-high federal debt

• Historically-unaffordable housing

That said, global investors have already signaled their optimism for a new Trump economy, as this week’s broad rally in asset prices makes evident.

Global markets surged late Tuesday as votes began to tally in his favor, and that continued through Wednesday’s trading session.

Veteran Wall Street strategist David Rosenberg warned that the new president will be forced to take on dangerously-stretched equity prices, which could have bleak repercussions. 

“Trump is walking into one of the most acute equity market bubbles of all time and he too will at some point be dealing with the fallout from the pricking of said bubble,” said Rosenberg, the founder of Rosenberg Research.  

Indeed, most market watchers expect rising stock prices to persist into 2025, and that bullishness will lift other assets, too. 

“In the near term, the prospect of lower taxes and a pro-business environment [under Trump] should keep sentiment relatively firm and risk appetite buoyant,” said ING chief economist James Knightley. 

To that point, bitcoin hit a record high above $76,200 late Wednesday.

Dogecoin and other tokens have also climbed over the last two days, as Trump has promised to helm the most crypto-friendly administration ever.

Meanwhile, bond prices have moved in the opposite direction. 

Yields on 10-year Treasuries — which climb as bond prices fall — have seen steep single-day swings.

The rise in yields reflects “the prospect of stronger growth and higher inflation expectations, which could ultimately lead to less Fed rate cuts,” Michael Reinking, senior market strategist for the New York Stock Exchange, said Wednesday.

“This is where markets are currently focused but over the next year the conversation will need to turn to fiscal deficits,” Reinking added.

And speaking of interest rates, Trump will be inheriting a Federal Reserve that has already kicked off a rate-cutting cycle with the hopes of achieving a soft landing. 

The central bank is widely expected to lower interest rates by 25 basis points on Thursday, and markets are currently betting another will come in December, according to CME data.

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Elsewhere:

🤝 Kamala Harris conceded the election. She phoned Trump Wednesday afternoon to congratulate him on the win, and then called on her supporters to “roll up your sleeves” during her concession speech at Howard University. (AP)

🇺🇸 The “America First” trade is back in vogue. Traders are preparing for Trump’s second term by buying up assets that win when the US outperforms the rest of the world. ETFs that represent made-in-America investment themes, for instance, surged Wednesday. (Bloomberg)

⚡️ Elon Musk bet big on Trump — and won. The billionaire business mogul spent over $132 million on politics this year, and Trump has promised him a role in the new administration. The pair’s embrace of free speech, deregulation, and anti-woke ideals made them a complementary match for the final stretch of the campaign. (Yahoo Finance)

Rapid-fire:

• Warner Bros. Discovery will report earnings before the bell Thursday following the loss of its NBA media rights deal (Yahoo Finance)

• Arm stock dropped overnight after reporting in-line earnings (Reuters)

• Qualcomm shares pop after beating quarterly earnings expectations, and it approved a $15 billion share repurchase plan (CNBC)

• Soaring bond yields suggest US borrowers may not get the relief they’ve been hoping for as Trump could complicate the Fed’s policy path (Business Insider)

• AMC Entertainment declined 6% in after-hours trading following a weak third quarter earnings report (Reuters)

Last thing:

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