November Econ Newsletter
What happened in November?
New US president: Donald Trump won the US presidential election with both electoral college and popular votes. Trump has promised to raise tariffs, cut taxes on both individuals and corporations and decrease regulations, especially in the energy and finance sectors.
The Threat of Trade Wars: Trump’s promise to raise tariffs by 60 % on Chinese goods increases the risk of inflation and the risk of a potential trade war. This comes at a challenging time for China’s economy, which is already dealing with a major property downturn, increasing local government debt and weak domestic demand. It is uncertain whether China will increase tariffs in response.
Election Super Year 2024: This year, 67 countries, representing over half of the world’s population (3.4 billion people) have held national elections. Voter turnout has also increased significantly compared to previous years. And many incumbents have been booted out. Yet, the operational impact of elections and governmental reshuffling can lead to reduced investor confidence driven by uncertainty about future trade policies, currency strength, and market sentiment, particularly if elections are prolonged and volatile.
What to watch out for in December?
China’s Bond Market: On Dec 4, news broke of yields on China’s 10-year government bond falling below 2%, the lowest on record. Since yields on bonds are inversely related to prices, it’s likely that investors are seeking the safety of Chinese bonds, increasing demand and driving up prices, amid slowing growth and uncertainty.
Stock Market: The US stock market is reaching record highs, with historical data suggesting continuing growth for December.
Australia’s social media ban: Australia has introduced a ban on social media use for children under 16 years old, though the legislation does not specify which platforms are included. The potential effects of this ban remain unclear, especially since there are no penalties for children who violate the policy. Many other countries, like Norway and France, are following similar policies. Social media giants will need to find new ways to comply with the policy changes. The short-term effect for companies is expected to be negative since many social media platforms are popular among children and adolescents.
Sources
https://www.bbc.com/news/articles/cn5w9w160xdo
https://www.bbc.com/news/articles/cev90d7wkk0o
https://www.reuters.com/world/china/why-chinas-economy-is-more-vulnerable-trump-tariffs-this-time-2024-11-06/
https://www.bbc.com/news/articles/cj6kj2752jlo
https://www.economist.com/international/2024/10/06/over-a-billion-have-voted-in-2024-has-democracy-won
https://www.internationalsos.com/magazine/65-elections-globally-in-2024-the-biggest-election-year-in-history
ttps://www.cnbc.com/2024/11/29/sp-500-usually-gains-in-december-when-its-risen-20percent-plus-year-to-date.html
https://finance.yahoo.com/news/live/stock-market-today-sp-500-nasdaq-slide-after-key-fed-inflation-gauge-shows-faltering-progress-151858913.html
https://www.reuters.com/markets/rates-bonds/chinas-relentless-bond-rally-pushes-10-year-yield-below-2-lowest-record-2024-12-02/
https://www.bbc.com/news/articles/c89vjj0lxx9o
https://technologymagazine.com/articles/how-social-media-bans-are-impacting-the-global-tech-industry
https://fortune.com/asia/2024/11/29/tech-firms-criticize-australias-rushed-social-media-ban-for-kids
Editor: Alexandra Digby
Author: Ada-Sofia Karoliina Kari