Trump’s Speech in Davos Boosts Markets Globally

The BLOM Stock Index (BSI) compiled by BLOM Invest Bank daily rose weekly by 0.66% to 2,557.62 points on January 24^th, 2025. This increase is largely attributed to optimism surrounding the newly elected Lebanese prime minister, Nawaf Salam, who is expected to form a new government in the upcoming week. Investors are hopeful that the new government will implement much-needed reforms to support the country’s economy.

On the Beirut Stock Exchange (BSE), the real estate sector dominated trading, accounting for 93.59% of the exchange’s total trading value, while the remaining were by the banking sector (5.93%) and industrial sector (0.48%). The most noteworthy trades throughout the mentioned period included:

As for the BLOM Preferred Shares Index (BPSI), it remained constant at 27.52.

US stocks saw a significant rise this week, with the S&P 500, Dow Jones, and NASDAQ Composite all recording gains of 2.04%, 2.48%, and 2.16% respectively. This increase came after US President Donald Trump’s call for lower interest rates and lower crude prices during his address to the World Economic Forum in Davos. The S&P 500 hit a record high on Thursday, driven by investor confidence in Trump’s pro-growth policies and a positive economic outlook. Strong corporate earnings, especially Netflix’s impressive quarterly results which boosted its share price by 16%, also played a key role in the market’s rise.

Across the Atlantic, European stock markets saw substantial gains this week, with major benchmarks rallying significantly. The DAX climbed by 2.93% to reach an all-time high on Friday, extending a nine-day streak. Meanwhile, the STOXX 600 rose by 1.58%, registering a record high on Thursday. The FTSE 100 increased by 1.76% and the CAC 40 surged by 3.77%. The positive performance was driven by reduced concerns over US tariffs on Chinese imports, which boosted investor confidence. Additionally, President Donald Trump’s push for additional European defense spending boosted the defense sector by over 4%. The tech sector surged too following Trump’s announcement of a $500 billion investment in artificial intelligence infrastructure in the US. The earnings season further highlighted strong corporate results, contributing to the overall market optimism.

Asian markets rose this week, with the NIKKEI, Hang Seng, and Shanghai Composite indices all posting gains. The NIKKEI increased by 3.92% over the week but fell on the last day after the Bank of Japan (BOJ) raised interest rates by 0.25% to 0.5%, the highest level since 2008. The rise in interest rates generally lowers stock valuations in most industries due to higher debt expenses or reduced revenue, except for some sectors like the financial industry. Meanwhile, the Hang Seng and Shanghai Composite indices rose by 2.46% and 0.33% respectively, as the Chinese government introduced new measures to support the stock market. Big state-owned insurance firms were directed to increase their investments in mainland-listed shares and allocate 30% of their new premiums to buying stocks. Additionally, Trump expressed a preference for reaching a deal with China rather than using tariffs, following a positive conversation with his Chinese counterpart. This helped lift investor sentiment in the region.

 As for the MSCI Emerging Market index, it also rose this week by 1.76% to record 1,089 points.

Similarly, Arab stock markets rose this week, with all major indices showing gains. The S&P Pan Arab index increased by 0.95%, Bourse Kuwait saw a 1.94% rise, the Saudi Stock Exchange was up by 0.80%, the Qatar Stock Exchange climbed by 1.80%, the Abu Dhabi Securities Exchange rose by 0.37%, and the Dubai Financial Market inched up by 0.31%. Despite the potential negative impact of President Donald Trump’s call for lower crude prices on these oil-reliant economies, his push for lower interest rates had a positive effect on stock markets. This is because GCC currencies are pegged to the US dollar, except for Kuwait, which uses a basket of currencies where the dollar has a significant share. As a result, GCC central banks typically follow the Federal Reserve’s decisions on interest rates. This alignment with US monetary policy helped boost investor sentiment and contributed to the overall rise in GCC stock markets.

Disclaimer:

This article is a research document that is owned and published by BLOMINVEST BANK SAL.

No material from this publication may be modified, copied, reproduced, repackaged, republished, circulated, transmitted or redistributed directly or indirectly, in whole or in any part, without the prior written authorization of BLOMINVEST BANK SAL.

The information and opinions contained in this document have been compiled from or arrived at in good faith from sources deemed reliable. Neither BLOMINVEST BANK SAL, nor any of its subsidiaries or affiliates or parent company will make any representation or warranty to the accuracy or completeness of the information contained herein.

Neither the information nor any opinion expressed in this research article constitutes an offer or a recommendation to buy or sell any assets or securities, or to provide investment advice.

This research article is prepared for general circulation and is circulated for general information only.