FirstFT: US fairness funds document $140bn of inflows on Trump’s ‘pro-growth’ agenda

At present’s agenda: Macron vows to remain on; DEI on the retreat; Yoon faces impeachment vote; Huge Learn on Chinese language exports beneath Trump 2.0; and the FT’s most influential girls of 2024

Good morning. Traders have pumped virtually $140bn into US fairness funds for the reason that election, making November the busiest month for inflows on data stretching to 2000.

What’s behind the surge? Merchants are betting that Donald Trump’s vows to chop rules and taxes will probably be a boon to company America. One fund supervisor cited the president-elect’s “market-friendly” picks for prime posts, together with financier Scott Bessent for Treasury secretary and crypto fanatic Paul Atkins as Securities and Change Fee chair. A Deutsche Financial institution strategist additionally stated strong projections for financial progress, company earnings and family money balances instructed the pattern of recent inflows might proceed into subsequent yr, albeit at a slower tempo.

Why it issues: The flood of recent cash has helped to drive the key US inventory indices to a collection of document highs — the S&P 500 has risen 5.3 per cent since election day — with merchants shrugging off issues that Trump’s deliberate tariffs might drive up inflation and threaten additional rate of interest cuts. Whereas the US has constantly outperformed areas corresponding to Europe lately, the query is whether or not this narrative of “American exceptionalism” has gone too far of late. The US is “over-owned, overvalued and overhyped”, Ruchir Sharma wrote this week. “As with all bubbles, it is hard to know when this one will deflate, or what will trigger its decline.” Learn extra concerning the document inflows.

For extra on markets from Rob, join the Unhedged publication right here when you’re a premium subscriber or improve your subscription right here. Right here’s what else we’re protecting tabs on at present and over the weekend:

• Financial information: The EU publishes its third-quarter GDP estimate, Germany releases its industrial manufacturing index for October, and the US has jobs figures and information from the College of Michigan’s client sentiment survey.

• South Korea: President Yoon Suk Yeol faces an impeachment vote tomorrow. The nation’s central financial institution chief informed the Monetary Instances that the martial regulation disaster had delayed crucial financial reforms however that Trump’s tariff threats had been of higher concern.

• Elections: Ghana holds presidential and parliamentary polls tomorrow. Romania has a presidential run-off vote the following day, tainted by official accusations of Russian meddling.

Be part of us subsequent Wednesday as Monetary Instances editor Roula Khalaf and different FT specialists talk about their predictions for the world in 2025. Register right here.

5 extra prime tales

1. Emmanuel Macron has vowed to not step apart earlier than the top of his time period, saying opposition events “chose chaos” by bringing down his premier in a historic no-confidence vote. The French president’s time period runs till 2027, however the ousting of Michel Barnier’s authorities is fuelling opposition requires him to step down early.

2. A US decide has rejected Boeing’s responsible plea settlement stemming from twin crashes of the 737 Max, citing range, fairness and inclusion concerns in choosing a company monitor to supervise compliance with the deal. A decide in Texas stated utilizing the standards would “undermine confidence” that the choice was primarily based on competency.

• DEI pullback: US corporations are accelerating their retreat from such initiatives amid an all-out assault from conservatives emboldened by the election of Donald Trump.

• ‘Anti-woke’ ETF: A brand new fund aiming to punish corporations targeted on DEI is making Starbucks its first goal.

3. Unique: Thames Water has acquired a bid from Covalis Capital that might see France’s Suez flown in to assist handle a break-up of the UK’s largest water utility earlier than itemizing it on the inventory market. The proposal got here forward of yesterday’s deadline for indicative bids for Thames, which is saddled with practically £19bn of debt and dangers working out of money within the new yr.

4. Donald Trump has named enterprise capitalist David Sacks because the White Home’s synthetic intelligence and cryptocurrency tsar. Sacks, a confidant of Elon Musk, was one of many earliest and most vocal Silicon Valley supporters of Trump, internet hosting a fundraiser for the candidate in San Francisco in June. Right here’s what we all know concerning the former PayPal govt.

5. The capturing of a UnitedHealth govt in Manhattan has triggered broad issues about company safety, with massive corporations dashing to evaluate whether or not their prime workers have enough safety. Safety chiefs of teams on each side of the Atlantic are sharing intelligence and making inquiries with specialist corporations on methods to defend prime executives.

• ‘Deny’, ‘defend’, ‘depose’: New York detectives are investigating inscriptions of phrases on bullet casings left on the scene of govt Brian Thompson’s homicide.

How effectively did you retain up with the information this week? Take our quiz.

The Huge Learn

Is China’s manufacturing juggernaut working out of street? Donald Trump’s return will pose one of many sternest exams but for the nation’s formidable export sector. As home demand suffers from a deep property stoop, Beijing is beneath strain to rethink the financial system’s growing dependence on outbound commerce.

We’re additionally studying . . . 

• World chip battle: The race for semiconductor dominance has entered murky waters because the business ponders tariffs and extra beneath Trump 2.0, writes Chris Miller, writer of Chip Battle.

• ‘Chancellor of peace’: Because the battle in Ukraine drags on, Germany’s Olaf Scholz is attempting to paint his rivals as warmongers forward of a snap vote in February.

• Sick man of Europe? Knowledge reveals a story about Britain’s illness-related inactivity disaster appears fallacious or at greatest overrated, writes John Burn-Murdoch.

• Rachel Reeves: In an op-ed for the FT, the UK chancellor explains how she goals to ship the federal government’s new “plan for change” by bringing enterprise innovation into Whitehall.

Chart of the day

Donald Trump, a self-described “Tariff Man”, will discover import taxes a slipshod and sometimes ineffective method of asserting American energy, writes Alan Beattie. Fairly merely, the US simply isn’t that large in international commerce any extra.

The FT’s Girls of 2024

From Charli XCX of “brat” fame to Europe’s former competitors commissioner Margrethe Vestager, we rejoice the ladies who’re remaking the world we dwell in at present. Learn FT Weekend’s checklist of 25 of the world’s most influential girls, written by the world’s most influential girls.