Wall Street Opens Positive as Bessent Nominated US Treasury Secretary

1. Bessent Nominated as US Treasury Secretary
President-elect Donald Trump has nominated Scott Bessent, a seasoned fund manager with a strong background in macro investments, as the next US Treasury Secretary. Known for his work with George Soros and Jim Chanos, Bessent brings a wealth of financial experience to the role. His nomination is being welcomed by the market, as Bessent is seen as a mainstream choice rather than an outsider.

In a Wall Street Journal interview, Bessent outlined key priorities for his tenure, including making Trump's tax cuts permanent, eliminating taxes on tips and overtime, and gradually implementing tariffs, though he stressed that the maximalist tariff positions, such as 60% on Chinese goods, could be softened. Additionally, he plans to focus on reducing the U.S. budget deficit and tackling the national debt.

Bessent's appointment has affected the bond markets, with yields falling and the dollar weakening. Stock index futures climbed on Wall Street in response to his nomination.

2. US Futures Set for Positive Start
US stock futures are pointing to a strong start this week, building on the positive momentum from the previous week. The Dow futures were up 260 points (0.6%), S&P 500 futures climbed 25 points (0.4%), and Nasdaq 100 futures gained 90 points (0.4%). All three major indexes had a positive week, with the Dow rising about 2% to a record high, while the S&P 500 and Nasdaq gained 1.7%.

This week's economic focus will be the Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve's preferred inflation gauge. The report, due on Wednesday, will be closely watched as inflationary pressures continue to influence the Fed's cautious stance on rate cuts.

3. Retail Sector in Focus Ahead of Thanksgiving
With Thanksgiving just days away, the retail sector is set to take center stage this week, with the holiday shopping season beginning in earnest. Investors will be eyeing earnings from major retailers such as Bath & Body Works, Best Buy, Macy's, Nordstrom, and Urban Outfitters.

Retail earnings from Walmart and Target last week highlighted diverging trends: Walmart raised its sales and profit forecast for the third straight quarter, while Target's outlook for the holiday season came in below expectations, causing its stock to dip. The focus will be on how inflation impacts consumer spending, as it accounts for a significant portion of US economic activity.

4. UniCredit Pursues Acquisition of Banco BPM
In European banking news, Italy's UniCredit has made a surprise €10 billion ($11 billion) all-share offer for Banco BPM, one of Italy's largest banks. The acquisition, if successful, would further solidify UniCredit's position as a leading pan-European banking group. UniCredit is also eyeing a potential deal with Germany's Commerzbank, though approval from the German government is still pending.

Conclusion

Wall Street is poised for a positive start to the week, with key developments such as Scott Bessent's Treasury Secretary nomination and ongoing retail sector earnings shaping market sentiment. Investors will also keep an eye on inflation data and the continuing reshaping of the European banking landscape through UniCredit's acquisition pursuits.