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Stock investors have pulled back after a surge following the election, as Jerome Powell's cautious stance on interest-rate cuts dampened enthusiasm for the Trump trade. The S&P 500 fell 2% over the week, erasing half of its gains since the election, amid rising bond yields and a broader decline across various asset classes, marking the worst week in 13 months.
UBS analysts warn that Trump's housing plan, which includes transforming federal land into homes and offering tax incentives for homeownership, may inadvertently raise home prices and mortgage rates due to limited infrastructure and increased buyer competition. Additionally, proposed deregulation and immigration policies could further complicate the housing market, exacerbating the existing supply shortage and driving up construction costs. The outlook for buyers remains uncertain, heavily influenced by the Federal Reserve's stance on interest rates.
Bitcoin's speculative excitement is waning following a 30% surge since the US election on November 5, driven by President-elect Trump's pro-crypto stance. The cryptocurrency dipped below $87,000 after comments from Federal Reserve Chair Jerome Powell regarding interest rates, later recovering to $90,265. In the derivatives market, a decline in the premium for CME-listed Bitcoin futures suggests a shift in risk profiles, with a notable increase in bearish options for a strike price of $80,000.
Investors are advised to build resilient portfolios amid economic uncertainty by focusing on enduring trends such as declining interest rates, the growth of artificial intelligence, and the safe haven status of gold. With interest rates expected to ease, investment-grade bonds and equity income strategies are recommended. Despite recent declines, gold"s outlook remains positive, supported by geopolitical factors and central bank diversification, while oil prices may recover as U.S. production stabilizes.
UBS analysts warn that Trump's housing plan, which includes converting federal land into homes and offering tax incentives for homeownership, may inadvertently raise home prices and mortgage rates due to limited infrastructure and increased buyer competition. Additionally, proposed deregulation and immigration policies could exacerbate the existing housing shortage and drive up construction costs, while the Federal Reserve's stance on interest rates adds uncertainty to the housing market's future.
Gold prices have retreated from record highs following the US election, influenced by rising inflation at 2.60% for October and steady core inflation at 3.3%. The Federal Reserve's reluctance to cut interest rates amid economic growth and geopolitical uncertainties may support gold demand, with the $2,500 mark seen as a potential support zone.
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Mortgage rates have stabilized, with the average 30-year fixed rate at 6.78% as of mid-November, offering some relief to homebuyers amid market volatility. Experts predict rates will remain in the 6% range into 2025, influenced by economic growth and potential Federal Reserve actions. Homeowners may benefit from refinancing, especially if they secured loans at higher rates last year, as home equity continues to rise significantly.
Treasuries edged higher, reducing their weekly losses as attention shifted from Donald Trump's election victory to economic data and Federal Reserve commentary. The yield on the 10-year note fell for a second consecutive day, while investors await US retail sales figures and insights from Fed officials. Fed Chair Jerome Powell's remarks on rate cuts contributed to a rise in two-year yields.
US markets are experiencing declines, with the SMI in the red, driven by muted expectations for interest rate cuts and concerns over President-elect Trump's personnel policy. Federal Reserve Chairman Jerome Powell dampened hopes for immediate rate reductions, with a December cut now seen at a 60% probability, down from 80% a month ago. Additionally, the appointment of Robert Kennedy Jr. as the new Secretary of Health and Human Services has unsettled investors, while Applied Materials' bleak outlook has disappointed technology stocks.
U.S. Treasury yields increased as investors reacted to Federal Reserve Chair Jerome Powell's comments, indicating that strong economic growth reduces the urgency for interest rate cuts. The 10-year yield rose to 4.4453%, while expectations for a December rate cut fell to 62.4%. Key economic data, including retail sales and industrial production, is anticipated for further insights.

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