Finance

Billionaire investor Stanley Druckenmiller believes Donald Trump’s re-election renewed a jolt of speculative enthusiasm in the markets and surging optimism within businesses.
“I’ve been doing this for 49 years, and we’re probably going from the most anti-business administration to the opposite,” Druckenmiller said on CNBC Monday. “We do a lot of talking to CEOs and companies on the ground. And I’d say CEOs are somewhere between relieved and giddy. So we’re a believer in animal spirits.”

While the notable investor, who now runs Duquesne Family Office, is bullish on the economy in the near-term, he remains somewhat cautious on the stock market because of elevated bond yields. He revealed that he is holding onto his short against Treasurys, effectively betting that bond prices will fall and yields will rise.
“In terms of the markets, I would say it’s complicated,” Druckenmiller said. “You’re going to have this push of a strong economy versus bond yields rising in response to that strong economy, and that kind of makes me not have a strong opinion one way or the other.”
The S&P 500 surged nearly 6% in November on Trump’s victory, bringing the benchmark’s 2024 gains to 23.3%. Trump’s promised tax cuts and deregulation have boosted risk assets dramatically, especially bank and energy stocks, as well as bitcoin, which just hit another record high Monday.
Druckenmiller, 71, said he would focus on individual stocks, not worrying about the broader market. The investor noted he’s bullish on companies where artificial intelligence is going to lower their costs and drive productivity. He didn’t reveal which AI stocks he’s betting on after selling out of Nvidia and Microsoft.
‘Risks are overblown’
As for concerns that Trump’s punitive tariffs would spoil the market rally and spike inflation, Druckenmiller believes that the revenue generated by duties could lessen the pressing fiscal problem in the country.

“We have a fiscal problem, we need revenues,” Druckenmiller said. “To me, tariffs are simply a consumption tax that foreigners pay for some of it. Now the risk is retaliation, but as long as we stay in the 10% range, …I think the risks are overblown relative to the rewards, the rewards on high.”

Trump’s trade memorandum to be issued Monday would not impose tariffs yet. His camp has been reportedly discussing a schedule of graduated tariffs increasing by about 2% to 5% a month on trading partners.
Druckenmiller once managed George Soros’ Quantum Fund and shot to fame after helping make a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.  More

U.S. President-elect Donald Trump speaks during a rally the day before he is scheduled to be inaugurated for a second term, in Washington, U.S., January 19, 2025. 
Brian Snyder | Reuters

President-elect Donald Trump is poised to sign a flurry of executive orders as soon as he’s sworn in, but imposing tariffs on U.S. trading partners won’t be one of the actions Monday.
Trump is set to issue a broad trade memorandum Monday that directs federal agencies to study and assess unfair trade practices and currency policies with other nations, especially China, Canada and Mexico. However, the memo stopped short at slapping any new duties on the countries.

The Wall Street Journal first reported on Trump’s move to hold off on imposing tariffs on his first day in the White House.
The president-elect’s plan on trade could be evolving from what he touted on the campaign trail. His camp has been discussing a schedule of graduated tariffs increasing by about 2% to 5% a month on trading partners, Bloomberg News reported last week.
Trump once made universal tariffs a core tenet of his economic campaign pitch, floating a 20% levy on all imports from all countries with a specifically harsh 60% rate for Chinese goods.
Many economists feared that such protectionist trade policy could make production of goods more expensive and raise consumer prices, just as the world recovers from pandemic-era inflation spikes.
— CNBC’s Megan Cassella contributed reporting. More

Chinese companies won’t likely step up investments in the U.S. under the incoming Trump administration, analysts said.
“That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND.
Chinese investment deals in the U.S. have slowed drastically since Trump’s first term, according to the latest American Enterprise Institute data.

Cho Tak Wong, the chairman of auto glass giant Fuyao Glass, bought the vacant General Motors manufacturing plant in Moraine, Ohio in 2014.
The Washington Post | The Washington Post | Getty Images

Chinese investments in the U.S. have dramatically declined since Donald Trump’s first term. This trend is unlikely to reverse as Trump returns to the White House, analysts said.
Trump has threatened additional tariffs on Chinese goods soon after his inauguration on Monday, building on an increasingly tough U.S. stance on Beijing.

“That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND.
“There’s an ideological mismatch. All the rhetoric is, keep China out of the U.S., let their products come in, which are low-end,” he said in an interview earlier this month. But other than that, “don’t, don’t let them come in.”
In the last several weeks, Emirati property giant Damac has pledged $20 billion to build data centers in the U.S., while SoftBank CEO Masayoshi Son announced a $100 billion investment for artificial intelligence development in the U.S. over Trump’s four-year term.

Chinese investment deals in the U.S. have slowed drastically, according to the latest American Enterprise Institute data. Just $860 million flowed into the U.S. in the first six months of 2024, following $1.66 billion in 2023. That’s down sharply from $46.86 billion in 2017, when Trump began his first term.
At the peak, Chinese companies had made high-profile U.S. acquisitions, such as buying the Waldorf Astoria hotel in New York. But regulators on both sides have stemmed the flow.

“Chinese investment in the U.S. has slowed down dramatically since Beijing tightened control over capital outflows in 2017, followed by a series of regulatory policies in the U.S. aimed at excluding investments in certain sectors,” Danielle Goh, senior research analyst at Rhodium Group, said in an email.
In the “foreseeable future,” she doesn’t expect Chinese investments in the U.S. will recover the peak levels seen during the 2016 to 2017 period. Goh pointed out that instead of acquisitions, Chinese companies have turned more to small joint ventures with U.S. companies or greenfield investments, in which business are built from scratch.
For example, Chinese battery manufacturing company EVE Energy is the technology partner with a 10% stake in a joint venture with U.S. engine company Cummins’ Accelera division, Daimler Truck and PACCAR. The companies announced in June 2024 they were kicking off plans for a battery factory in Mississippi that would begin production in 2027 and create more than 2,000 jobs.
Since the Covid-19 pandemic, the U.S.-China Chamber of Commerce has mostly helped Chinese e-commerce companies set up local offices, rather than establish manufacturing businesses, the nonprofit’s president Siva Yam told CNBC.
“Most of those investment nowadays tend to be a little bit smaller, so they are not on the radar, easier to approve,” he said, referring to regulators in both the U.S. and China. But he remained uncertain about whether Chinese companies could use investments to offset the impact of tariffs.
Individual U.S. states have grown increasingly wary of Chinese investment. Last spring, Politico reported that more than 20 states were passing new restrictions on land purchases by Chinese citizens and companies, or updating existing rules.
Chinese hackers in December targeted a government office that reviews foreign investment in the United States, CNN reported, citing U.S. officials. This was part of a wider breach of the Treasury Department, which declined a CNBC request for comment.

Deal-making strategy?

Trump has indicated tariffs may be used to coerce Chinese investment in the U.S.
In his speech accepting the Republican nomination, he said, “I will bring auto jobs back to our country, through the proper use of taxes, tariffs, and incentives, and will not allow massive auto manufacturing plants to be built in Mexico, China, or other countries.”
“The way they will sell their product in America is to BUILD it in America, and ONLY in America. This will create massive jobs and wealth for our country,” he said, according to an NBC News transcript.
Chinese battery giant CATL reportedly said in November it would build a U.S. plant if Trump allowed it. The company did not immediately respond to a request for comment.
Advocacy group Center for American Progress pointed out in December that during his first term, Trump cancelled restrictions on Chinese telecommunications company ZTE — just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-affiliated theme park in Indonesia.
The Trump transition team did not immediately respond to a request for comment on the ZTE deal or the opportunities for Chinese companies to invest in the U.S.
Even if Trump welcomed more Chinese investment, or coerced it through tariffs, large investments are long-term processes that won’t happen overnight, pointed out Derek Scissors, senior fellow at the American Enterprise Institute.
Then there’s the unpredictability of the president-elect’s policies.
“Trump saying the U.S. is open to Chinese companies in 2025 is no guarantee [even] for 2029,” he said. More

The Consumer Financial Protection Bureau fined Equifax $15 million over credit reporting errors.
The CFPB alleged the credit bureau failed to properly investigate consumer disputes.
Credit reports have a significant impact on consumer finances, experts said. They may dictate someone’s success in qualifying for a loan, renting an apartment or getting a job.

Elijah Nouvelage/Bloomberg via Getty Images

The Consumer Financial Protection Bureau fined Equifax $15 million over errors tied to consumer credit reports, alleging the company failed to conduct proper investigations of disputed information, the federal watchdog announced Friday.
Equifax is one of three major credit reporting agencies in the U.S., a group that also includes Experian and TransUnion.

“Equifax ignored consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores,” according to the CFPB’s order.

Why credit reports are important

Credit reports are a ledger of consumers’ borrowing records, such as loan payment history and bankruptcy filings.
The financial consequences of inaccurate information on those reports can be “severe,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.
“It can change your ability to qualify for a loan, to get a job, to rent an apartment, all kinds of things that are very fundamental to navigating your personal life,” Rust said.

Equifax had ‘flawed’ process, CFPB says

Equifax processes about 765,000 consumer disputes a month, CFPB said.

Its “flawed” dispute policies and technology failures occurred since at least October 2017, “to the detriment of millions of consumers,” according to the CFPB, which alleged Equifax violated the Fair Credit Reporting Act.
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Equifax settled the allegations to “[turn] the page on the CFPB’s long-running investigation,” a company spokesperson wrote in an e-mail.
The company has invested more than $1.5 billion in technology and infrastructure improvements over the last few years, including “significant changes” to its dispute process and consumer support, the spokesperson said.
“Our Purpose is to help people live their financial best and we know consumers and our customers depend on our data for important financial decisions,” they wrote. “Even one error affecting a consumer is one error too many.”

The $15 million civil penalty follows a lawsuit CFPB filed against another credit bureau, Experian, on Jan. 7, alleging the company conducted “sham” investigations of credit report errors. In a statement on its site, Experian said the lawsuit was “completely without merit” and an “example of irresponsible overreach.”
“Credit bureaus have been sued repeatedly for this kind of conduct,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “They’re decades-old problems.”
An Equifax data breach in 2017 also compromised the personal information of 147 million consumers, for which the company ultimately agreed to settle for $700 million.

How to have good ‘hygiene’ with credit reports

Consumers should check their credit reports at least once a year, Rust said. The Federal Trade Commission also recommends doing a check before applying for credit, a loan, insurance or a job.
Consumers should ensure they recognize identity information on their credit report such as addresses and Social Security numbers, and verify that account information such as debt balances and delinquency status are correct.
“That’s just a good practice of financial hygiene,” Rust said.

Importantly, a credit report differs from a credit score. The latter is a numerical output compiled with information on a consumer’s credit report.
“If you see a sudden change in credit score, that’s a signal,” Rust said.
The three major credit bureaus allow consumers to request a free copy of their credit report once a week. Consumers can request a copy at AnnualCreditReport.com and by calling 1-877-322-8228. Other sites may charge consumers or be fraudulent, according to the Federal Trade Commission.

What to do about a credit report error

Smith Collection/gado | Archive Photos | Getty Images

Consumers who see an error on their credit report should dispute it in writing, along with documentation. Send that by postal mail to the credit bureau and request a return receipt, Wu said. Consumers have better odds of resolution by mail than online, she said.
Consumers should also file a complaint with the CFPB and their state attorney general’s office, Wu said.
Consumers can ask that a statement of their dispute be included in their file and in future credit reports, and also ask the credit bureau to provide their statement to anyone who received a copy of their report in the recent past, Wu said.

Consumers who can’t get an error fixed after repeated attempts may wish to consult an attorney, she said.
“Not every error will be worth bringing a lawsuit,” she said. “But if your loan ends up being more expensive because of a credit reporting error, that’s the kind of real harm [for which] you may want to consider litigation.”
Consumers may be able to find an attorney through organizations such as the National Association of Consumer Advocates, Wu said. More

The company at the heart of “Severance”, a celebrated TV show that just began its second season, features a department of “Macrodata Refinement”. Its workers must spot disconcerting numbers and lock them away in a digital bin. Does China’s National Bureau of Statistics (NBS) have a similar department? If so, it excelled itself this week. More

Bitcoin should rip higher under President-elect Donald Trump, according to BlackRock’s ETF chief.
Samara Cohen, the firm’s ETF and index instruments chief investment officer, thinks cryptocurrency deregulation will “absolutely” propel bitcoin to another historic year.

“There will be progress made on… FIT21 [“Financial Innovation and Technology for the 21st Century Act.] There will be progress made on stable coins. There will be progress made just on definitions in taxonomy,” she told CNBC’s “ETF Edge” this week.
Cohen is behind the firm’s iShares Bitcoin Trust (IBIT) – which is up 114% since its January 2024 debut and up almost 8% year to date. It comes as bitcoin briefly traded above $100,000 this week.
Despite the strong performance, she suggests cryptocurrency investors need an iron stomach.
“Bitcoin is a risky asset. So, 15% in the context of Bitcoin is not an enormous move. Investors should expect volatility,” said Cohen. “But in the long term, the price of bitcoin is really going to be determined by the level and pace of adoption.”
On Monday, BlackRock announced the official launch of its iShares Bitcoin ETF on CBOE Canada.
And, it’s not the only firm making an early year push deeper into cryptocurrency. Calamos Investments plans to launch its Bitcoin Structured Alt Protection ETF next Wednesday – two days after Trump’s inauguration. According to the press release, it’s the “world’s first 100% downside protected bitcoin ETF.”

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American investment banks disclosed a record-smashing quarter, helped by surging trading activity around the U.S. election and a pickup in investment banking deal flow.
JPMorgan Chase, Goldman Sachs and Morgan Stanley easily topped estimates for the fourth quarter.
And deal activity is only picking up steam, according to bank executives.

Jonathan Gray, president and chief operating officer of Blackstone Inc., from left, Ron O’Hanley, chief executive officer of State Street Corp., Ted Pick, chief executive officer of Morgan Stanley, Marc Rowan, chief executive officer of Apollo Global Management LLC, and David Solomon, chief executive officer of Goldman Sachs Group Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 19, 2024.
Paul Yeung | Bloomberg | Getty Images

American investment banks just disclosed a record-smashing quarter, helped by surging trading activity around the U.S. election and a pickup in investment banking deal flow.
Traders at JPMorgan Chase, for instance, have never had a better fourth quarter after seeing revenue surge 21% to $7 billion, while Goldman Sachs’ equities business generated $13.4 billion for the full year — also a record.

For Wall Street, it was a welcome return to the type of environment craved by traders and bankers after a muted period when the Federal Reserve was raising rates as it grappled with inflation. Boosted by a Fed in easing mode and the election of Donald Trump in November, banks including JPMorgan, Goldman and Morgan Stanley easily topped expectations for the quarter.
But the grand machinery keeping Wall Street moving is just picking up steam. That’s because, deterred by regulatory uncertainty and higher borrowing costs, U.S. corporations have mostly sat on the sidelines in recent years when it came to buying competitors or selling themselves.
That’s about to change, according to Morgan Stanley CEO Ted Pick. Buoyed by confidence in the business environment, including hopes for lower corporate taxes and smoother approvals on mergers, banks are seeing growing backlogs of merger deals, according to Pick and Goldman CEO David Solomon.
Morgan Stanley’s deal pipeline is “the strongest it’s been in 5 to 10 years, maybe even longer,” Pick said Thursday.

‘Pounding the table’

Capital markets activity including debt and equity issuance had already begun recovering last year, rising 25% from the depressed levels of 2023, per Dealogic figures. But without normal levels of merger activity, the entire Wall Street ecosystem has been missing a key driver of activity.

Multibillion-dollar acquisitions sit at “the top of the waterfall” for investment banks like Morgan Stanley, Pick explained, because they are high-margin transactions that “have a multiplier effect through the whole organization.”
That’s because they create the need for other types of transactions, like massive loans, credit facilities or stock issuance, while generating millions of dollars in wealth for executives that needs to be managed professionally.
“The last piece is what we’ve been waiting for, which are M&A tickets,” Pick said, referring to the contracts governing merger deals. “We are excited about pushing that through to the rest of the investment bank.”
Results from Goldman on Wednesday spurred veteran Morgan Stanley banking analyst Betsy Graseck to raise her 2025 forecast for the bank’s earnings by 9%.
“We’re pounding the table on the capital markets rebound theme,” Graseck said in a note. “Expect more EPS beats throughout this year as the industry trading wallet grows and investment banking activity rebounds.”

IPO revival?

Another engine of value creation for Wall Street that has been slow in recent years is the IPO market — which is also set to pick up, Solomon told an audience of tech investors and employees Wednesday.
“There has been a meaningful shift in CEO confidence,” Solomon said earlier that day. “There is a significant backlog from sponsors and an overall increased appetite for deal-making supported by an improving regulatory backdrop.”
After a lean few years, it should make for a profitable time for Wall Street’s dealmakers and traders.
WATCH: Goldman Sachs tops estimates More

Fed Governor Christopher Waller told CNBC on Thursday that the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.
“As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” he said.
Traders increased their bets for a slightly more aggressive pace of rate cuts following Waller’s remarks.

Federal Reserve Governor Christopher Waller said Thursday that the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.
In a CNBC interview, the policymaker said he expects the first cut could come in the first half of the year, with others to follow so long as economic data on prices and unemployment cooperate.

“As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” Waller said during a “Squawk on the Street” interview with Sara Eisen.
Asked how many that could entail, he responded, “That’s all going to be driven by the data. I mean, if we make a lot of progress, you could do more,” which he said could mean three or four, assuming quarter percentage point increments.
“If the data doesn’t cooperate, then you’re going to be back to two and going maybe even one, if we just get a lot of sticky inflation,” he said.
Traders increased their bets for a slightly more aggressive pace of rate cuts following Waller’s remarks. Market-implied odds for a May move rose to about 50%, though June appeared to be the better bet, according to CME Group data. Expectations for a second reduction by the end of the year climbed to about 55%, or about 10 percentage points higher than before he spoke.
At the core of Waller’s hopes for easing is a belief that inflation will ease further as the year goes on, despite several months’ of data showing stickiness in some key prices. The consumer price index slowed to a 3.2% core reading, excluding food and energy, for December, down 0.1 percentage point from the prior month though still well above the Fed’s 2% target.

“Right now, I think inflation is going to continue to come in towards our target. The year over year, stickiness that we saw in 2024 I think will start to dissipate,” he said. “So I may be a little more optimistic about inflation coming down than the rest of my colleagues, and that’s what’s driving my outlook for the path for policy.”
At the December meeting, Federal Open Market Committee members penciled in two cuts for 2025, though commentary after the meeting has pointed toward a cautious and patient approach.
The FOMC next meets Jan. 28-29, with markets pricing in almost no chance of a move.
“Well, January, we need to kind of see what’s going to happen. … We’re in really no rush to do things,” Waller said.

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