Investing.com — Wall Street is set for a muted start Friday, but the main averages are on course to register a positive week. Bitcoin nears an important threshold, while the debate continues over who will fill the role as Treasury Secretary in the new Trump administration..
1. Warsh to become Treasury Secretary?
The search for the person to fill the role of Treasury Secretary in the new Trump administration continues, with the Wall Street Journal reporting that President-elect Donald Trump has floated the idea of appointing Kevin Warsh as Treasury Secretary on the understanding that he could later be Federal Reserve Chairman.
Warsh is a former investment banker who served on the Federal Reserve Board from 2006 to 2011, and currently lectures at Stanford.
No announcement has been made by Trump, and the likes of Marc Rowan, who co-founded Apollo Global Management (NYSE:APO), US Senator Bill Hagerty of Tennessee and Robert Lighthizer, who served as Trump’s U.S. trade representative for essentially the then-president’s entire term, are also considered to be in the running for the role.
“The relevance of the pick for financial markets will probably be how the US Treasury market reacts,” analysts at ING said, in a note.
“A candidate with proven reliability will be well-received by the bond markets, while those with less experience – or perhaps a candidate that will offer less of a counterweight to some of President-elect Trump’s plans – could see the long end of the US Treasury market sell-off and perhaps even soften the dollar too.”
Trump announced late Thursday that his new pick for attorney general is Pam Bondi, who previously served as Florida’s attorney general.
The announcement came just hours after his controversial first selection, Matt Gaetz, withdrew from consideration.
2. Futures set for muted start
US stock futures traded in a muted fashion Friday, at the end of a broadly positive week on Wall Street.
By 03:50 ET (08:50 GMT), the Dow futures contract was up 40 points, or 0.1%, S&P 500 futures climbed 2 points, or 0.1%, and Nasdaq 100 futures fell by 12 points, or 0.1%.
The main benchmarks closed higher Thursday, helped by Nvidia (NASDAQ:NVDA), the world’s most valuable listed company, posting gains after an earnings beat.
The Dow Jones Industrial Average is on course to record gains of 1% this week, while the S&P 500 is 1.3% higher and the Nasdaq Composite up 1.6%.
Investors will study the preliminary purchasing managers index reports for November, while both Gap (NYSE:GAP) and Intuit (NASDAQ:INTU) will also be in the spotlight after the companies reported quarterly earnings after Thursday’s close.
3. Bitcoin nears $100,000 milestone
Bitcoin is fast approaching the $100,000 threshold as demand for the world’s most widely-used cryptocurrency remains strong as investors anticipate Donald Trump’s return to the White House.
At 03:50 ET (08:55 GMT), Bitcoin rose 1.9% to $98,744.0, having hit a record high of $99,289.3 earlier in the session, breaching the $99,000 level for the first time.
The digital currency was up around 9% this week, and has more than doubled in value from its lows so far in 2024.
The prime driver of these gains has been the result of the US presidential election as investors bet that President-elect Donald Trump and his administration will bring in friendlier regulations.
Trump promised to make America the “crypto capital of the planet” during his campaign, and had also floated the idea of a Bitcoin national reserve.
Crypto markets were also enthused by Securities and Exchange Commission Chairman Gary Gensler stating he will step down in January after Trump takes office.
Gensler has led a harsh crackdown on the crypto industry over the past two years.
Bitcoin’s recent moves higher also triggered a wave of short liquidations – more than $100 million in a 24-hour period at one point, according to CoinGlass – sending the price further up overnight.
4. Europe’s economic woes
Data released earlier Friday vividly illustrated the economic woes that Europe is currently suffering, pointing to further interest rate cuts by both the European Central Bank and the Bank of England.
The German economy grew less than previously estimated in the third quarter, as gross domestic product grew by 0.1% in the third quarter of 2024 compared with the previous quarter, down from a preliminary reading of 0.2% growth.
The annual reading showed a fall of 0.3% from the same quarter a year ago, weaker than the earlier reading of a drop of 0.2%.
The rest of the eurozone is doing notably better than Germany, but the world’s third-biggest economy still represents more than 30% of the bloc’s gross domestic product.
The ECB last trimmed interest rates in October, and is widely anticipated to ease again at the December meeting.
Additionally, British retail sales fell by much more than expected in October, dropping 0.7% on a monthly basis, the sharpest since June when sales fell by 1.0% from May.
A monthly rise in sales in September was also revised down to 0.1% from a previous estimate of a 0.3% gain.
The Office for National Statistics said retailers across the board reported that consumers held back on spending ahead of the new government’s first tax and spending budget on Oct. 30.
The BoE cut its base rate by 25 basis points to 4.75% earlier this month, and the market is pricing in four more reductions in 2025.
5. Crude set for strong weekly gains
Crude prices edged higher Friday, on course for hefty weekly gains amid increasing concerns the conflict between Russia and Ukraine will lead to supply disruptions.
By 03:50 ET, the US crude futures (WTI) climbed 0.7% to $70.62 a barrel, while the Brent contract rose 0.7% to $74.78 a barrel.
Both contracts were trading up between 4% and 5% for the week, the strongest weekly performance since late September, with traders attaching a greater risk premium to crude after Kyiv began using Western-made long-range missiles.
Russia responded by lowering its threshold for nuclear retaliation, and reportedly fired a hypersonic medium-range ballistic missile at a Ukrainian target, warning of a global conflict that could impact oil supply from one of the world’s largest producers.
Supply disruptions in Norway and reports that the Organization of Petroleum Exporting Countries and allies, known as OPEC+, was likely to postpone a planned production hike have also supported oil prices this week.