(Bloomberg) — Equities and Treasuries advanced, with traders embracing Donald Trump’s pick of Scott Bessent for Treasury Secretary as a measured choice that would inject more stability into the US economy and financial markets.
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A gauge of Asian stocks rose 0.9%, led by gains in Japan, South Korea and Australia. US futures also edged higher. Meanwhile, the yield on 10-year Treasuries dropped five basis points to 4.35%. The dollar declined while Bitcoin rebounded from a weekend drop.
The market moves mark a reversal of some elements of the so-called Trump Trade that feature a surging dollar and rallying Bitcoin. Traders have trimmed bets that interest rates will remain elevated and underpin the greenback as the incoming US administration lowers taxes and boosts tariffs.
Bessent, who runs macro hedge fund Key Square Group, has indicated he’ll back Trump’s tariff and tax cut plans but investors expect him to prioritize economic and market stability over scoring political points. The nomination has eased concerns over the incoming president’s protectionist policies, which had threatened to stoke inflation, worsen trade tensions and amplify market volatility.
“We have the Trump reflationary agenda with obviously maybe someone in charge of the economy at the Treasury who is probably more gradualist,” Vincent Juvyns, global market strategist at JPMorgan Asset Management, told Bloomberg TV. “US exceptionalism will to some extent remain in place on the economic front but also on the market front.”
Stock benchmarks in India surged on Monday as Prime Minister Narendra Modi’s Bharatiya Janata Party-led alliance secured a thumping victory in the nation’s wealthiest state of Maharashtra. Still, local equities remain well off their highs for the year, as global funds have withdrawn over $14 billion since October amid concerns over earnings growth, elevated valuations and the recent US charges against the Adani Group.
“This is a short-term relief rally,” said Sonam Srivastava, founder of Wright Research. “We have to wait for a substantial return of foreign capital.”
Chinese stocks bucked the region’s trend, reflecting investors’ continued disappointment with a lack of stronger fiscal measures to revive the world’s No. 2 economy. Meanwhile, the country’s central bank kept a policy loan rate unchanged after last cutting it in September.
