Macrosynthesis

TLDR

• Trump’s team picks prioritize loyalty over experience, signaling a partisan agenda.
• DOGE, led by Musk and Ramaswamy, aims to cut federal spending, impacting contractors like CACI.
• Traders are split on a December rate cut as strong data lifts yields and deficit concerns grow.
• U.S. export prices rose 0.8% in October, led by agriculture, but remain down 0.1% year-over-year.
• Companies like GEO, Lockheed, and Caterpillar benefit from Trump’s defense, energy, and infrastructure policies.
• Upcoming focus: PMI, housing data, Fed speeches, and global rate decisions.

Trump Transition Team Selections Highlight Loyalty Over Experience

President-elect Donald Trump has selected a number of loyalists and conservative figures to fill key positions in his incoming administration, signaling a shift towards prioritizing political alignment over extensive government or policy experience.

Some key appointments include:

• Attorney General: Rep. Matt Gaetz - A close Trump ally with no prior experience in law enforcement or the Justice Department.
• Director of National Intelligence: Former Rep. Tulsi Gabbard - An outsider to the intelligence community, despite the sensitive nature of the role.
• Defense Secretary: Pete Hegseth - A Fox News personality with limited military leadership experience.
• Homeland Security Secretary: Gov. Kristi Noem - Known for her resistance to COVID-19 restrictions, but lacking a background in federal homeland security.
• Department of Government Efficiency: Trump has announced the creation of a new "Department of Government Efficiency" (DOGE) to be led by Tesla CEO Elon Musk and entrepreneur Vivek Ramaswamy.

These selections represent a marked contrast from Trump's previous administration, where he frequently clashed with officials who did not fully align with his agenda. The new picks suggest Trump is focused on surrounding himself with ideological allies.

While the Republican-controlled Senate is expected to confirm most of these nominees, some may face challenging confirmation battles given their controversial backgrounds and lack of traditional qualifications.

D.O.G.E

President-elect Donald Trump announced the creation of the Department of Government Efficiency (DOGE), to be led by Elon Musk and Vivek Ramaswamy. This initiative aims to cut excess regulations, eliminate wasteful expenditures, and restructure federal agencies. The project, described as a “Manhattan Project” for efficiency, plans to complete its work by July 4, 2026, aligning with the nation’s 250th anniversary. Musk previously estimated that $2 trillion could be trimmed from the federal budget, while Ramaswamy proposed drastic workforce reductions, such as firing 50% of federal employees:

"On Day 1, *instantly* fire 50% of federal bureaucrats.

Here’s how: if your SSN ends in an odd number, you’re fired.

That downsizes government by half. Absolutely *nothing* will break as a result.

It doesn’t violate civil service rules because mass layoffs are exempt."

Trump emphasized plans to address fraud, improper payments, and conduct a comprehensive audit of federal spending-- stating that DOGE will finish operations by no later than July 4th, 2026. However, this aggressive downsizing could significantly disrupt government contractors (GovCon) heavily reliant on federal budgets. Companies like CACI, Leidos (LDOS), Booz Allen Hamilton (BAH), and SAIC may face substantial revenue losses as federal agency restructuring reduces contracting opportunities. The reduction in bureaucratic oversight and elimination of redundant projects may also lead to fewer contracts for intelligence, IT, health, and defense services, forcing these firms to adapt fast or risk decline.

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Make America Healthy Again

Robert F. Kennedy Jr.'s appointment to lead the Department of Health and Human Services (HHS) could lead to a crackdown on artificial sweeteners, including high fructose corn syrup (HFCS). Kennedy has openly criticized ultra-processed foods, which include HFCS, as contributors to diet-related chronic diseases. His stance on reforming school lunches and reducing the prevalence of processed foods aligns with these views, signaling potential regulatory action targeting HFCS producers. Publicly traded companies like Archer Daniels Midland (ADM), Ingredion (INGR), and Tate & Lyle (TATE.L), which are significant HFCS suppliers, may face stricter oversight or decreased demand due to these policy shifts.

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Cut or No Cut?

Bond traders now see just over a 50% chance of a Federal Reserve rate cut in December, down from 80% earlier, as strong economic data gives officials room for caution. The 10-year Treasury yield surged to 4.5%, the highest since May, following retail sales data revisions. Fed Chair Jerome Powell and Boston Fed chief Susan Collins signaled that upcoming decisions depend on further data. Meanwhile, Wall Street economists have adjusted forecasts, with some predicting slower easing in 2025 under President-elect Trump, whose policies may influence inflation. Long-term yields rose sharply, reflecting concerns about larger deficits under Republican governance.

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US Export Prices Surge in October

US export prices rose 0.8% in October 2024, the largest increase since August 2023, surpassing market expectations of a 0.1% decline. This followed a revised 0.6% drop in September. The increase was driven by a significant 2% rise in agricultural export prices, the highest since November 2022, due to higher prices for commodities like corn, soybeans, meat, and fruit. Non-agricultural export prices also climbed 0.6%, with gains in industrial supplies, capital goods, automotive vehicles, and nonagricultural foods offsetting a decline in consumer goods prices. Despite the monthly gain, export prices remained 0.1% lower compared to the previous year.

Upcoming Week

The upcoming week will feature a relatively quiet economic calendar in the US, with the spotlight on manufacturing and services PMI data as well as housing market updates. Key releases include the US Manufacturing and Services PMI on Monday, followed by Building Permits, Housing Starts on Tuesday, and Existing Home Sales on Wednesday. On the monetary policy front, speeches by Federal Reserve officials and ECB President Christine Lagarde will draw attention, along with interest rate decisions from central banks in China, Turkey, and South Africa.

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Uranium

+3.74%  (1D Chg)

+6.92% (1W Chg)

Gold

-4.54% (1W Chg)

+24.24% (YTD Chg)

Cocoa

+21% (1W Chg)

+12.17% (1M Chg)

Lumber

+8.68% (1W Chg)

+16.19% (1M Chg)

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Stocks Impacted by Trump Policies

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• Diamondback Energy ($FANG): Trump’s pro-energy agenda, including expanded fracking and reduced drilling restrictions, would create a favorable environment for companies like Diamondback. Increased oil and natural gas production opportunities would boost revenues in key markets.
• Bitcoin ($BTC): Trump’s proposed deregulation of the cryptocurrency sector positions Bitcoin to thrive under a more favorable regulatory environment. His public support for making the U.S. a “bitcoin superpower” with a national stockpile of bitcoins would encourage investment in digital currencies.
• General Motors ($GM): Tariffs on imported vehicles would enhance GM’s competitiveness in the U.S. market. Trump’s potential elimination of EV subsidies would favor GM’s gas-powered vehicle lineup.
• Nucor ($NUE): U.S. steelmakers like Nucor would benefit from tariffs on imported goods, reducing foreign competition. Trump’s focus on infrastructure development would further drive domestic steel demand.

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New Features

Stock Price Alerts

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Upcoming Earnings:

Tuesday: Walmart (WMT), Lowes (LOW), Keysight (KEYS)

Wednesday: Target (TGT), Wix.com (WIX), Nvidia (NVDA), Snowflake (SNOW), Palo Alto Networks (PANW)
Thursday: Deer & Co (DE), BJ's Wholesale (BJ), Intuit (INTU), Gap (GAP)

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