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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-820x461.jpeg" alt="" class="wp-image-552774" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Jakub Porzycki | Nurphoto | Getty Images</figcaption></figure>



Bitcoin reached a fresh all-time high near $81,000 and futures premiums soared, in a clear sign that investors believe the record-run in the world’s largest cryptocurrency is poised for even more gains on the back of U.S. elections that saw a swell of pro-crypto candidates win office.



Open interest in bitcoin’s price surpassing $90,000 rose to more than $2.8 billion on the popular Deribit derivatives exchange, one of a few crypto native platforms that offers futures trading. Deribit encompasses most of the offshore options market.



“The options market’s bias is heavily toward continued momentum. Call options trade at a premium to puts, and open interest in out-of-the-money calls has grown,”&nbsp;Vetle Lunde,&nbsp;head of research at K33 Research, told CNBC.



A call option gives the buyer the right to buy shares of an underlying asset at a certain price for a specified period of time. Buying a call option is a bet the asset price will move higher. Buying a put option is a bet the asset price will fall.



The CME derivates exchange offers bitcoin futures contracts and is a popular way for institutions in the U.S. to make bets on the future price of bitcoin. Velde told CNBC that on Friday CME premiums for ether and bitcoin averaged 14.5% and 14%, respectively. Ahead of the election, Velde says these premiums sat at 7%, and had spent a majority of the past half year hovering slightly below 10%.



“The recent surge is a meaningful deviation higher emphasizing the bullish flows of late,” he added, noting that yields more or less stabilized well into the double digits after the election became clear.



“Alongside the growth in leverage, we saw the first meaningful example of growing yields in offshore derivatives, indicative of the move being led by determined risk-takers positioning for further upside,” said Velde.



The early innings of bitcoin’s push higher coincided with substantial growth in open interest in perpetual swaps, or contracts that allow buyers to speculate on where they think prices are headed without a set expiration date.



But liquidity in crypto markets on weekends is typically poorer than during weekdays, as neither CME futures nor ETFs are open to trade, so moves thus tend to overreact and substantially retrace once these markets open again, according to Velde.



President-elect Donald Trump promised on the campaign trail to turn the United States into the “crypto capital of the planet.” His multiple pledges to the crypto community included launching a national crypto stockpile with the more than $16 billion in bitcoin the U.S. government has amassed through asset seizures, as well as slashing interest rates. The easing of monetary policy typically dovetails with a surge in crypto prices since it makes it cheaper to borrow money.



The Federal Reserve, which guides the country’s monetary policy, sets the benchmark rate. It also, by design, operates independently from the White House. On Thursday, the Fed approved its second consecutive interest rate cut.



On the back of election results and the Fed’s unanimous vote to again slash the benchmark rate, the crypto market broadly surged into the weekend. Ether eclipsed bitcoin’s rise, up 30% in the last seven days, and solana’s market cap topped $100 billion on Sunday.



The total market cap of all spot bitcoin ETFs is now above $80 billion, and in the last three trading days alone, the spot funds collectively added $2.3 billion.



Within fintech, companies tied to crypto were some of the top performers, after candidates funded by the crypto industry won races up and down the ballot.



Coinbase shares jumped 48% for the week, their strongest performance since January 2023. Coinbase was one of the top corporate donors in the election cycle, giving more than $75 million to Fairshake and its affiliate PACs, including a fresh pledge of $25 million to support the pro-crypto super PAC in the 2026 midterms.



Trump has vowed to oust SEC Chair Gary Gensler, which potentially bodes well for companies like Coinbase fighting the regulator in court over alleged securities offenses.



“Tuesday night was certainly a big night for crypto and the crypto voter,” Coinbase’s chief legal officer Paul Grewal said in an interview. “We’re going to have the most pro-crypto Congress ever, and Coinbase has played some part in all of that.”



Robinhood, which allows users to buy and sell a number of digital currencies, rose 27% for the week. The online brokerage received a Wells Notice from the SEC in May, a move that often precedes formal charges.



Robinhood’s general manager for its crypto unit told CNBC that the goal at Robinhood is to be able to work within the administration.



“If you think about crypto, it’s a very fast-moving pace. It’s complicated, it was made by engineers, for engineers,” said Johann Kerbrat, the Vice President and General Manager of&nbsp;Robinhood&nbsp;Crypto. “We want to help policymakers to understand it and help them drive the right protections for the customers.”

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-820x461.jpg" alt="" class="wp-image-551642" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/104823443-GettyImages-869487498.jpg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Federal Reserve Chairman Jerome Powell said Thursday that he will not step down if President-elect Donald Trump asks for his resignation.



When asked whether he would resign if requested to by Trump, the Fed chair simply said: “No.” Powell subsequently told reporters that the president does not have the power to fire or demote him.



“Not permitted under the law,” Powell told reporters at a news conference, after the Fed cut interest rates by a quarter percentage point. 



Investors will be closely watching the president-elect’s contentious relationship with the Fed chair. Trump appointed Powell in 2017, but repeatedly lashed out against the central bank chief during his first term as president, arguing Powell was not easing monetary policy quickly enough.



Trump said in an October interview that the president should be able to weigh in on interest rate decisions.



“I don’t think I should be allowed to order it, but I think I have the right to put in comments as to whether the interest rates should go up or down,” Trump told Bloomberg News at the Economic Club of Chicago on Oct. 15.



As Covid-19 swept the nation in March 2020, Trump claimed the authority to remove Powell from office. The Fed chair’s term ends in 2026.



Powell also said Thursday that Trump’s election victory this week will not have any immediate impact on the central bank’s policy.&nbsp;



“In the near term, the election will have no effects on our policy decisions,” Powell told reporters.



The Republican Party also won a majority in the Senate in Tuesday’s election. If the GOP takes the House of Representatives as well, Trump should have an easier path to pass his economic agenda.&nbsp;



Steve Mnuchin, Trump’s former Treasury secretary, said the president-elect will likely focus on cutting taxes and imposing tariffs, particularly on China.  



Powell said the next administration’s policies could have an economic effect that would impact the Fed’s dual mandate of maximum employment and price stability.&nbsp;But it is still too early to tell and the Fed is not making any assumptions, Powell said.&nbsp;



“It’s such an early stage,” Powell said. “We don’t know what the policies are, and once we know what they are, we won’t have a sense of when they’ll be implemented,” he said.

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Powell says he would not resign as Fed chief if Trump asked for his resignation

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-scaled.jpeg" alt="" class="wp-image-551572" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-scaled.jpeg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108059394-1730955309734-gettyimages-2182206041-fc_1208661-1536x1024.jpeg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Pictured here is a construction site of property developer Hongkong Land, in Shanghai on Nov. 4, 2024. Feature China | Future Publishing | Getty Images</figcaption></figure>



BEIJING – China is widely expected to unveil more stimulus on Friday after its parliament ends a five-day meeting.



Authorities here have ramped up stimulus announcements since late September, fueling a stock rally. President Xi Jinping led a meeting on Sept. 26 that called for strengthening fiscal and monetary support, and stopping the real estate market slump.



While the People’s Bank of China has already cut several interest rates, major increases in government debt and spending requires approval by the country’s parliament, called the National People’s Congress.



That approval could be granted at the weeklong meeting of the legislature’s standing committee. During a similar meeting in October of last year, authorities had approved a rare increase in China’s deficit to 3.8%, from 3%, according to state media.



Analysts expect an increase in the scale of fiscal support after Donald Trump — who has threatened harsh tariffs on Chinese goods — won the U.S. presidential election this week. But some are still cautious, warning that Beijing may remain conservative and not issue direct support to consumers.



When discussing planned fiscal support at a press conference last month, Minister of Finance Lan Fo’an emphasized the need to address local government debt problems.



At the parliamentary meeting so far, officials have reviewed a plan to increase the limit on how much debt local governments can issue, according to state media. The additional quota would go toward swapping out local governments’ hidden debt.



Nomura estimates that China has 50 trillion yuan to 60 trillion yuan ($7 trillion to $8.4 trillion) in such hidden debt, and expects Beijing could allow local authorities to increase deb issuance by 10 trillion yuan over the next few years.



That could save local governments 300 billion yuan in interest payments a year, Nomura said.



In recent years, the country’s real estate slump has drastically limited a significant source of local government revenues. Regional authorities have also had to spend on Covid-19 controls during the pandemic.



Even before then, local Chinese government debt had grown to 22% of GDP by the end of 2019, far more than the growth in revenue available to pay that debt, according to an International Monetary Fund report.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-820x461.jpeg" alt="" class="wp-image-551327" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057984-1730831808377-gettyimages-2176083179-AFP_36JD9UV.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Tesla CEO Elon Musk (R) joins former U.S. President and Republican presidential candidate Donald Trump during a campaign rally at the site of his first assassination attempt in Butler, Pennsylvania, on Oct. 5, 2024. Jim Watson | Afp | Getty Images</figcaption></figure>



As Donald Trump celebrated his presidential victory early Wednesday morning, Elon Musk was right there with him.



“A star is born. Elon,” Trump said onstage at his Mar-a-Lago resort, thanking the world’s richest person for spending two weeks campaigning in Pennsylvania.



Musk, who poured at least $130 million into a pro-Trump campaign effort, turned Trump support into yet another full-time job in recent months, funding a swing-state operation to register voters and using his social media platform X to constantly tout his preferred candidate, frequently with misinformation.



Musk’s investment in Trump is already paying off, even though Trump doesn’t take office until Jan. 20.



Tesla shares soared 15% on Wednesday, adding roughly $15 billion in paper value to Musk’s net worth. The electric vehicle maker faces headwinds in the global market from China-based competitors, declining European sales and consumers’ growing distaste for his political views.



But with Musk cozying up to Trump, and the president-elect promising to slash the types of regulations that Musk abhors, Wall Street is betting Tesla, on balance, will be a beneficiary.



For Musk, the potential gains go well beyond Tesla.



During his victory speech, Trump also praised Musk’s SpaceX and thanked Musk for delivering Starlink Wi-Fi terminals to Hurricane-stricken parts of the U.S. That all leaves Musk with plenty of reasons to be optimistic that a second Trump administration will pay healthy dividends to him and his businesses.



Musk’s companies are currently embroiled in a range of probes and lawsuits from federal agencies pertaining to matters including alleged securities law violations, workplace safety, labor and civil rights violations, violations of federal environmental laws, consumer fraud and vehicle safety defects.



Given the executive branch’s outsized control over federal regulatory bodies, Musk can look forward to regulators and intelligence agencies winding down some or all of the 19 known ongoing federal investigations and lawsuits against Tesla, SpaceX and X, formerly known as Twitter.



At New York’s Madison Square Garden on Oct. 27, Musk was one of many Trump fans and surrogates to speak during an all-day rally. Much of the coverage of the event focused on comedian Tony Hinchcliffe’s bigoted quips, including his description of Puerto Rico as a “floating island of garbage.”



Musk was introduced by Cantor Fitzgerald CEO Howard Lutnick, who called the Tesla CEO the “greatest capitalist” in U.S. history. Lutnick said he and Musk were co-founders of the envisioned “Department of Government Efficiency” and he asked Musk how much he thought could be cut from the federal budget.



Musk answered “at least $2 trillion,” which is more than the federal government’s discretionary budget of $1.7 trillion. The remark received a scream from Lutnick and applause from the crowd.



Musk didn’t specify what he sought to cut, but he previously accused agencies including the SEC, Environmental Protection Agency and Federal Aviation Administration of regulatory overreach or infringing on his free speech rights.



He also accused the Biden administration of hiring too many IRS personnel, and has vocally objected to a so-called billionaires tax.



Having a role in a bespoke commission could give Musk power over federal agencies’ budgets, staffing and the ability to push for the elimination of inconvenient regulations.



Musk also said during a Tesla earnings call on Oct. 23, that he intended to use his sway with Trump to establish a “federal approval process for autonomous vehicles.” Currently, approvals happen at the state level.



Tesla has been working on driverless technology for more than a decade but hasn’t yet produced a robotaxi or vehicle safe to use without a human ready to steer or brake at any time.



Additionally, a Trump administration may agree to ramp up the government’s work with his companies.



Musk’s newest startup, xAI, is developing large language models and generative artificial intelligence software that aims to compete with similar products from Microsoft-backed OpenAI, Meta and others.&nbsp;



Meta recently announced its open-source Llama models were available to U.S. government agencies in the areas of defense and national security. And OpenAI is already working with the U.S. military after adding a retired U.S. Army general and former director of the National Security Agency to its board in June.



Musk didn’t respond to a request for comment.



<h2 class="wp-block-heading" id="h-spacex-s-billions-in-federal-contracts">SpaceX’s billions in federal contracts</h2>



According to research on federal spending and prime contracts by FedScout, SpaceX has received more than $19 billion from contracts with the federal government since 2008, including from NASA, the U.S. Air Force and Space Force.



The company is on track to take in several billions of dollars annually from prime contracts with the federal government for years to come, according to FedScout CEO Geoff Orazem.



That number doesn’t include classified spending, smaller items like Starlink terminals, or spending that’s done at the state level via block grants from the federal government, like when the Federal Emergency Management Agency gives states assistance to help recover from natural disasters.



Meanwhile, Tesla has reported around $10 billion in sales of “automotive regulatory credits,” or environmental credits, since 2015, Orazem found by evaluating the company’s financial filings.



These incentives are largely derived from federal and state regulations in the U.S. that require automakers to sell some number of low-emission vehicles or buy credits from companies like Tesla, which often have an excess.



Regulatory credits were about 60% of Tesla’s net income in the second quarter of 2024, and 39% in the third quarter. Other government rebates on EV sales represented about 50% of Tesla’s third-quarter profit.



Trump hasn’t made clear whether he’ll maintain those rebates and regulatory credit programs. He previously said he may cut the federal $7,500 EV tax credit.



Additionally, Trump has promised to slash income taxes and to implement steep tariffs. While tariffs&nbsp;could help protect Tesla from Chinese competitors, such a move could involve significant disruption to Tesla’s automotive supply chain, which relies on some materials and parts from China.



When it comes to worker protections, Musk has been seeking to strike down the constitutional authority of the National Labor Relations Board through litigation. He may find such lawsuits are no longer needed if Trump is willing to eliminate or reduce the power of the agency, which is supposed to ensure that companies follow federal laws allowing workers to form unions and engage in collective bargaining with their employers.



Then there’s Musk’s involvement with sanctioned governments.



At SpaceX, Musk has withheld the use of Starlink, the company’s satellite internet service, over Taiwan, even for U.S. troops based there. The Wall Street Journal reported that Musk cut off access as a favor requested by Russian President Vladimir Putin allegedly on behalf of Chinese President Xi Jinping during a series of ongoing, frequent talks between the two men.



In response to the reports, NASA Administrator Bill Nelson said if they were true, Musk’s conversations with Putin should be be federally investigated.



According to analysis by NBC News, Musk has repeatedly posted pro-Kremlin content to his hundreds of millions of followers on X. He even engaged with content from Tenet Media and its creators at least 60 times on the social network. Tenet was at the center of an alleged Russian covert operation to manipulate U.S. public opinion ahead of the 2024 election, according to the Department of Justice. 



While Vice President-elect JD Vance recently called Putin a U.S. adversary, Trump has frequently spoken of his affection for the Russian president, even since Russia’s devastating invasion of Ukraine in 2022. Kremlin officials have celebrated Trump’s victory in this week’s election.



Musk, who publicly endorsed Trump moments after the first assassination attempt on the former president in July, has said he intends to remain involved in U.S. politics for the long haul.



He said in a discussion on X on Tuesday that his super PAC would continue its work after the presidential election and would seek to influence the outcomes of midterms, intermediate elections and elections of local prosecutors across the U.S.



A priority, Musk said, would be to help elect district attorneys “who prosecute repeat violent criminals who are obviously a danger to people.”

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-820x461.jpeg" alt="" class="wp-image-551324" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058872-1730902372279-gettyimages-1197718058-jm1_4964.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A man holds an American flag depicting president-elect Donald Trump at Parliament Square in London in 2020. Jeff J Mitchell | Getty Images News | Getty Images</figcaption></figure>



The U.K. holds dear to its so-called “special relationship” with the U.S., priding itself on a long history of shared values and cultural, diplomatic, linguistic and commercial ties with the States.



London feels those long-standing bonds and geopolitical interests make its relationship with the U.S., well, special.



Whether that feeling of exceptionalism and unique closeness is appreciate or felt as keenly across the Atlantic has always been a bone of contention for London, however, and the bond between the U.S. and U.K. could be tested further when Donald Trump returns to the White House following his election win.



In the run-up to the vote, Britain’s Prime Minister Keir Starmer had looked to strengthen the relationship with Trump, checking in on the Republican leader after an assassination attempt against him, and traveling to New York with Foreign Secretary David Lammy to dine with him at Trump Tower in September.



Congratulating the president-elect on his decisive win, Starmer posted on X that he looked forward to a collaborative partnership with Trump



“As the closest of allies, we stand shoulder to shoulder in defence of our shared values of freedom, democracy and enterprise,” he commented, adding, “From growth and security to innovation and tech, I know that the U.K.-U.S. special relationship will continue to prosper on both sides of the Atlantic for years to come.”



Still, Starmer might have some groveling to do with a new Trump administration.



Tensions flared last month when Trump’s campaign team in October accused the Labour Party of “blatant foreign interference” in the presidential election after party activists travelled to the U.S. to help Harris’ campaign. Starmer and the party denied the accusations.



There’s no doubt that the leaders are cut from different cloths — the brash and unpredictable character of businessman-turned-politician Trump is a far cry from the more measured style of the former human rights lawyer who once took on big business in high-profile court cases.



Addressing British lawmakers on Wednesday, Starmer reacted to Trump’s win by reaffirming his commitment to good relations with the U.S., stating “it is absolutely crucial that we have a strong relationship, that strong special relationship forged in difficult circumstances, between the U.S. and the U.K.”



But Kemi Badenoch, the new leader of Britain’s opposition Conservative Party, which is more ideologically aligned with the Republicans, goaded Starmer over past criticism of Trump by the current Labour foreign minister who, in 2018, called Trump a “woman-hating, neo-Nazi-sympathising sociopath” and a “profound threat to the international order” in a magazine article. Lammy has since said he would work with Trump and would look to persuade the infamously NATO-skeptic Republican to remain in the military alliance.



<h2 class="wp-block-heading" id="h-the-uk-can-lie-low"><a></a>The UK can lie low</h2>



Economists say Britain should not expect any special treatment when a new Trump administration comes into force, but they note it’s unlikely the U.K would be a prime target for punitive policies, such as import tariffs, that could be levied on the European Union and China as Trump looks to boost America’s growth and competitiveness.



Trump has already threatened to revive a trade war that began during his first term in office, stating in his election campaign that he would raise tariffs on Chinese goods by 60-100%, and would impose a blanket 10% tariff (or potentially 20%) on all U.S. imports, a move opening up a new front in trade tensions with two of its largest trading partners, the EU and China. The U.K., now outside the European bloc, might find its post-Brexit position an advantage.



“The U.K. is, quite frankly, probably small enough to be off the radar,” Kallum Pickering, chief economist at Peel Hunt, told CNBC after Trump’s election win.



“We’re not part of the EU anymore. China and the EU are the big two [that will be targeted by Trump]. We won’t come into any issues around NATO commitments, because we meet our own. Whereas with Europe, Trump could conceivably say, ‘we’ll threaten you with a trade war, but if you increase your military spend and meet your NATO commitments, we’ll not put tariffs on,’” Pickering said, noting that “Trump likes to trade everything off.”



While “Starmer may have offended Trump at some point, or David Lammy might have offended America,” Pickering noted that “these are relatively small potatoes versus Trump’s issues with Europe and NATO or China containment. So I think with a bit of careful diplomacy, the U.K. and the U.S. can get on good terms quickly,” he said.



<h2 class="wp-block-heading"><a></a>Not so special anymore</h2>



Describing the “special relationship” as one of convenience for the U.S., Pickering said the U.K. could still maneuver itself to be useful to an incoming Trump government.



“The key thing for the U.K. is, can it reassert itself as this mid-Atlantic broker between America and Europe now that it’s outside of the EU? This was always the U.K.’s advantage — to be the English speaking common-law, American partner within the European Union, and by brokering that relationship, that allowed us to punch above our weight diplomatically.”



Whisper it, but the “special relationship” ceased to be special long ago, according to Holger Schmieding, chief economist at Berenberg.



“Apart from strong cooperation on intelligence gathering and few military aspects, all recent U.S. administrations have treated the U.K. as a normal mid-size European country,” Schmieding told CNBC Wednesday.



“That Trump and Starmer are apparently not fans of each other, to put it mildly, will not help in future U.S.-U.K. talks. But it is not the decisive factor, largely because for the U.S. will probably not be inclined to give any special treatment to any country in Europe,” he said.



Schmieding said it’s advisable for the U.K. to coordinate its response to Trump with its European neighbors, notably on how to react if Trump cuts U.S. military aid to Ukraine, as expected, meaning Europe is on the hook for the funding gap left by Ukraine’s strongest ally since Russia invaded in February 2022.



Although the picture has improved since Trump was last in office, from 2017 to 2021, the president-elect is likely to continue to harangue European members of NATO to increase their defense spending, a perennial bugbear for Trump.



NATO members committed in 2014 to spending 2% of their national gross domestic product on defense but laggards remain, including Germany, France, Italy, Turkey, Spain and Canada. Even the Netherlands, whose former leader Mark Rutte is now NATO chief, has failed to meet the spending pledge.



After being elected to office in July, Starmer made a “cast-iron commitment” to raise U.K. defense spending to 2.5% of GDP, but has refused to give a timetable for the increase. Still, the U.K. is in Trump’s good books when it comes to defense spend, with its expenditure in the arena standing at 2.3% of GDP in 2023, NATO figures show. The U.S. spent 3.2%, making it the second-largest spender after Poland, at 3.9%.



Trump rattled NATO members in February when he said he would not provide military protection to any member state that had not met its financial obligations to the bloc, and would even “encourage” adversaries “to do whatever the hell they want” to that nation.

108058872-1730902372279-gettyimages-1197718058-jm1_4964

Britain loves its ‘special relationship’ with the U.S. — but that doesn’t mean Trump will love it back

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-820x461.jpeg" alt="" class="wp-image-551143" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. Aly Song | Reuters</figcaption></figure>



BEIJING — Donald Trump’s 2024 presidential win has raised the bar for China’s fiscal stimulus plans, expected Friday.



On the campaign trial, Trump threatened to impose additional tariffs of 60% or more on Chinese goods sold to the U.S. Increased duties of at least 10% under Trump’s first term as president did not dent America’s position as China’s largest trading partner.



But new tariffs — potentially on a larger scale — would come at a pivotal time for China. The country is relying more on exports for growth as it battles with a real estate slump and tepid consumer spending.



If Trump raises tariffs to 60%, that could reduce China’s exports by $200 billion, causing a 1 percentage point drag on GDP, Zhu Baoliang, a former chief economist at China’s economic planning agency, said at a Citigroup conference.



Since late September, Chinese authorities have ramped up efforts to support slowing economic growth. The standing committee of the National People’s Congress — the country’s parliament — is expected to approve additional fiscal stimulus at its meeting this week, which wraps up Friday.



“In response to potential ‘Trump shocks,’ the Chinese government is likely to introduce greater stimulus measures,” said Yue Su, principal economist at the Economist Intelligence Unit. “The overlap of the NPC meeting with the U.S. election outcome suggests the government is prepared to take swift action.”



She expects a stimulus package of more than 10 trillion yuan ($1.39 billion), with about 6 trillion yuan going towards local government debt swaps and bank recapitalization. More than 4 trillion yuan will likely go towards local government special bonds for supporting real estate, Su said. She did not specify over what time period.



<h2 class="wp-block-heading" id="h-stock-market-divergence"><a></a>Stock market divergence</h2>



Mainland China and Hong Kong stocks fell Wednesday as it became clear that Trump would win the election. U.S. stocks then soared with the three major indexes hitting record highs. In Thursday morning trading, Chinese stocks tried to hold mild gains.



That divergence in stock performance indicates China’s stimulus “will be slightly bigger than the baseline scenario,” said Liqian Ren, who leads WisdomTree’s quantitative investment capabilities. She estimates Beijing will add about 2 trillion yuan to 3 trillion yuan a year in support.



Ren doesn’t expect significantly larger support due to uncertainties around how Trump might act. She pointed out that tariffs hurt both countries, but restrictions on tech and investment have a greater impact on China.



Trump, during his first term as president, put Chinese telecommunications giant Huawei on a blacklist that restricted it from using U.S. suppliers. The Biden administration expanded on those moves by limiting U.S. sales of advanced semiconductors to China, and pressuring allies to do the same.



Both Democrats and Republicans supported the passage of those newer export controls and efforts to boost semiconductor manufacturing investment in the U.S., Chris Miller, author of “Chip War,” pointed out earlier this year. He expected the U.S. to increase such restrictions regardless of who won the election.



China has doubled down on bolstering its own tech by encouraging bank loans to high-end manufacturing. But the country had long benefited from U.S. capital as well as the ability to use U.S. software and high-end parts.



Republicans gained a majority in the Senate for the next two years, according to NBC News projections, though control of the House of Representatives remains unclear.



“If the Republican Party gains control of Congress, protectionist measures could be accelerated, amplifying impacts on the global economy and presenting significant downside risks,” Su said.



She expects Trump will likely impose such tariffs in the first half of next year, and could speed up the process by invoking the International Emergency Economic Powers Act or Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% in response to a serious balance-of-payments deficit.



U.S. data shows that the trade deficit with China narrowed to $279.11 billion in 2023, from $346.83 billion in 2016.



Su estimated that a 10% tariff increase on Chinese exports to the U.S. could reduce Beijing’s real GDP growth by an average of 0.3 to 0.4 percentage points in the next two years, assuming other factors remain constant.



China’s exports to the U.S. fell by 14% last year to $500.29 billion, according to customs data on Wind Information. That’s still up from $385.08 billion in 2016, before Trump was sworn in for his first term.



Meanwhile, China’s annual imports from the U.S. climbed to $164.16 billion in 2023, up from $134.4 billion in 2016, the Chinese data showed.



Other analysts believe that Beijing will remain conservative, and trickle out stimulus over the coming months rather than release a large package on Friday.



China’s top leaders typically meet in mid-December to discuss economic plans for the year ahead. Then, officials would announce the growth target for the year at an annual parliamentary meeting in March.



“China will likely face much higher tariff from the U.S. next year. I expect policy response from China to also take place next year when higher tariff is imposed,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note Wednesday afternoon.



“I also don’t think the government will change the policies they already proposed to the NPC because of US election,” he said.



<h2 class="wp-block-heading"><a></a>China’s growing global trade influence</h2>



Regardless of tariffs, China remains an export powerhouse to markets outside the U.S.



“Chinese exports have indeed shifted a bit in the past few years in terms of destination, with the U.S. representing less than 15% of total Chinese exports in 2023, compared with nearly 18% on average in the 2010s,” Francoise Huang, senior economist for Asia-Pacific and global trade at&nbsp;Allianz&nbsp;Trade, said in September.



“While China has lost market share in the U.S., it’s clearly been gaining in other places,” she said. “For example, China now represents more than 25% of ASEAN imports, compared with less than 18% in the 2010s.”



China’s exports have also grown to countries that sell to the U.S., a Federal Reserve report found in August.



— CNBC’s Dylan Butts contributed to this report.

106677114-15983545702020-08-25t100023z_1719720997_rc2yki97n9wc_rtrmadp_0_usa-china-tech

Trump win and threat of more tariffs raises expectations for more China stimulus

From coffee beans to milk

From coffee beans to milk, meet the Singapore-based start-up using AI to vet ingredients

Does The President Actually Control The U.S. Economy?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-820x547.jpeg" alt="" class="wp-image-550810" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Republican presidential nominee, former U.S. President Donald Trump arrives to speak during an election night event at the Palm Beach Convention Center on November 06, 2024 in West Palm Beach, Florida. 
Chip Somodevilla | Getty Images</figcaption></figure>



Donald Trump declared victory in the presidential election early Wednesday morning, as the Republican led Kamala Harris in projected Electoral College votes in the presidential election.



Neither Trump nor Harris has secured the 270 Electoral College votes needed to win the White House, but after NBC News projected he will win Pennsylvania, the former president was just four electoral votes short of that goal.



“I want to thank the American people for the extraordinary honor of being elected your 47th president and your 45th president,” Trump told supporters at the West Palm Beach, Florida, Convention Center, where he was flanked by family members and top members of his campaign.



“We’re going to help our country heal,” Trump said. “We’re going to fix everything about our country.”



“We made history for a reason tonight,” he said. “This will truly be the golden age of America.”



Trump during his speech praised Tesla CEO Elon Musk for supporting him in his campaign, which included the “We have a new star, a star is born, Elon!” Trump said of Musk, who is the richest person in the world.



Trump also touted his support from Robert F. Kennedy Jr., the independent candidate who ended his campaign for president.



Trump said Kennedy, a vaccine skeptic and conspiracy theorist, would play a key role in determining health-care policy in his administration.



Harris had been expected to address her own supporters Tuesday night at the Democrat’s alma mater, Howard University, in Washington, D.C.



But the vice president opted not to speak, and instead plans to do so later Wednesday.



This is developing news. Check back for updates.

108058638-1730878289255-gettyimages-2183214745-_s1_8329_zo2b6egr

Trump declares victory as presidential race with Harris has yet to be called

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-820x461.jpeg" alt="" class="wp-image-550762" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Bitcoin rallied overnight, hitting an all-time high as investors bet former President Donald Trump was gaining an edge in the U.S. election as results rolled in.



The price of the flagship cryptocurrency touched a record $75,000 on the nose, according to Coin Metrics. It was last higher by 7% at $74,392.00. It first hit its previous record of $73,797.68 on March 14 and has traded in a narrow range below $70,000 for most of the year since then.



Bitcoin’s overnight gains increased as Trump took an early lead in the Electoral College. NBC News has projected that Trump has won 230 electoral college votes, including the battleground state of North Carolina.



Exchange operator Coinbase rose 3% in after hours trading, while MicroStrategy, advanced 4%.



Investors expect bitcoin trading to be choppy until a clear winner is declared. A victory for Vice President Kamala Harris is expected to bring risk of downside moves to the price of bitcoin, while traders anticipate a bump in price in the event of a win by former President Donald Trump.



“The election is having a massive influence on crypto,” said Ryan Rasmussen, head of research at Bitwise Asset Management. “Expect bitcoin – and crypto more broadly – to be choppy in the days ahead … until we have definitive election results.”



“If Trump wins, I believe we’ll see new all-time highs,” Rasmussen added. “If Harris wins, I expect a decent short-term sell-off, with prices taking a month or two to recover. But eventually, either way, I think we go higher.”



In the 2012, 2016 and 2020 elections, bitcoin saw returns of roughly 87%, 44% and 145% in the 90 days following election day, respectively. That’s in part because election years happen to fall on Bitcoin halving years, when the supply of the cryptocurrency ratchets downward. Post election returns have also tended to align with major Federal Reserve policy shifts. This year, the market is looking forward to further interest rate reductions.



At just below $70,000, bitcoin has been trading at its fair value price heading into election day, according to CryptoQuant. That means that if the election proves to be a positive catalyst in the coming days, bitcoin can rally and is poised to establish a new record, CryptoQuant analyst Julio Moreno said.



“For now, everyone we’ve spoken to is keeping their powder dry,” said James Davies, CEO at crypto futures and options trading platform Crypto Valley Exchange. “I’ve heard from numerous leading market makers and traders and can say with conviction that almost everyone is set up to react. They don’t even know which way markets will go based on [the] result. There’s likely to be massive short-term volatility whichever outcome.”



This year’s presidential election has been called the most important one in the crypto industry’s lifetime. Many view a Harris win as a threat to crypto, the extent to which has been debated throughout this election cycle. Trump, on the other hand, is seen by many as a force for good in the industry after he presented himself earlier this year as the pro-crypto candidate and has been courting the industry more directly than Harris has.



Many voters are concerned about the state of the government deficit, which rose 8% in the 2024 fiscal year to $1.8 trillion, and increased tax cuts promised by both candidates. Bitcoin, like gold, is seen by many investors as a hedge against the potential for fiscal and monetary policy that combine to reduce the value of the dollar and lift inflation.

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