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US stocks including Tesla rose, bitcoin hit a fresh record and the US dollar advanced to a four-month high as investors raised bets on the big winners from Donald Trump’s US presidential election victory.
The dollar was up 0.5 per cent against a basket of its peers on Monday, passing the level it hit the day after the election last week and taking it to its highest since July. The euro was down 0.6 per cent, having fallen during the session to as low as $1.063, its lowest level since April.
In New York, the S&P 500 rose 0.2 per cent, although the Nasdaq Composite fell 0.1 per cent, with shares in Tesla up 8 per cent. The electric vehicle maker has surged past a $1tn market capitalisation since election day, helping boost chief executive Elon Musk’s personal net wealth by about $32bn.
“Markets are in euphoria territory right now,” said Drew Pettit, director of US equity strategy with Citi. “The optimists are winning by thinking that Trump will be market- and economy-friendly. They are skipping the argument that bad things may happen.”
Bitcoin, which has hit a series of record highs since the election, surged 11 per cent to hit $84,985 for the first time, as the Republican party looked increasingly likely to take control of the House of Representatives, having already won a majority in the Senate.
The Trump administration is widely expected to be supportive of the crypto industry and, with control of both chambers of Congress, would have greater power to enact favourable legislation.
The total value of the global crypto market rose above $3tn for the first time in three years, according to crypto data provider CoinGecko. Cryptocurrency exchange Coinbase rose 18 per cent while broker Robinhood added 12 per cent.
“What we are seeing is that people are keen to jump on the Trump trade sooner rather than later,” said Emmanuel Cau, head of European equity strategy at Barclays.
The performance of crypto and other so-called “Trump trades” showed growing anticipation that the former president would take a light-touch approach to regulation during his second term, said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers.
“Investors are willing to take risks, even with more protectionism in the pipeline,” he said, referring to Trump’s plans to sharply increase tariffs on imports to the US.
The Republican candidate’s decisive victory drove traders to price in the president-elect’s promises of tax cuts and tariffs, fuelling the dollar and sparking a sell-off in US government bonds.
Trading in Treasuries, which have recovered much of their post-election losses, is closed for the Veterans Day public holiday in the US.
The Financial Times reported last week that Robert Lighthizer, Trump’s trade envoy during his first-term trade war with China, had been asked to take the job again. “Any clues on Trump’s appointments may be market moving,” said Deutsche Bank’s Jim Reid.
The Mexican peso, which had performed poorly in the run-up to the election and was highly volatile on election day, was down 1.2 per cent at 20.41 to the dollar.
Additional reporting by Will Schmitt in New York and Shotaro Tani in London
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