The Stable Genius Report

• Capital spending is skyrocketing.
• Annualized capital spending under the Biden administration (2023-2024) is 3.7%.
• Annualized capital spending under a Trump administration (1H 2025) is projected at 8.4%.
• The projected capital spending rate under a Trump administration is significantly higher than under the Biden administration.
• The data source for Real Private Non-Residential Fixed Investment is the Bureau of Economic Analysis.

The post presents a claim of significantly higher capital spending under a future 'Trump' administration, which, if perceived as credible, could influence market expectations for future economic growth, corporate investment, and ultimately, corporate earnings. Increased private non-residential fixed investment is generally a positive signal for S&P 500 companies involved in various sectors like manufacturing, technology, and infrastructure. However, it is a projected figure for the future (1H 2025) rather than an immediate policy change.

The post focuses exclusively on domestic economic performance metrics, specifically capital spending, without any mention of international relations, foreign policy, military actions, or geopolitical tensions.

• Commodities: Industrial commodities like Copper and Silver are likely to rise due to implied robust economic growth and increased industrial demand. Gold (XAU) may experience downward pressure if the implied strong US economy leads to a strengthening US Dollar. Oil (WTI) demand could increase with enhanced industrial activity. Short-Term Watchlist: XAU/USD price action, industrial metals futures, energy demand forecasts. Medium-Term Focus: Global industrial production trends, US manufacturing output, USD trajectory.
• Currencies (Forex): The US Dollar Index (DXY) is likely to strengthen due to the implied strong US economic outlook and potential for higher interest rates. This could lead to a fall in pairs like EURUSD and a rise in USDJPY. Short-Term Watchlist: Fed speakers' commentary, US Treasury yield movements, global risk appetite. Medium-Term Focus: Central bank policy divergence (Fed vs. ECB/BoJ), US economic growth differentials.
• Global Equities: US equities, including the S&P 500 and Nasdaq, are likely to respond positively to the projected strong domestic economic growth and business investment. Other global indices (STOXX 600, Nikkei 225, Hang Seng) may see indirect positive sentiment but could also experience capital shift towards potentially higher returns in the US market. Short-Term Watchlist: US equity futures, performance of industrial and technology sectors. Medium-Term Focus: Corporate earnings revisions, global capital flow dynamics.
• Fixed Income (Bonds): US 10Y and 2Y yields are likely to rise as strong capital spending implies robust economic growth and potential inflationary pressures, reducing demand for safe-haven bonds. Flight to safety is less probable. Credit spreads may tighten if overall risk appetite increases. Short-Term Watchlist: Treasury yield levels, inflation expectations (e.g., TIPS breakevens). Medium-Term Focus: Fed monetary policy outlook, fiscal spending and debt rhetoric.
• Volatility / Derivatives: The VIX is likely to compress as the post indicates a positive outlook for future economic growth, which typically reduces market uncertainty and perceived risk. Options positioning may reflect increased bullishness. Short-Term Watchlist: VIX levels versus futures term structure. Medium-Term Focus: Economic surprise indices, policy predictability.
• Crypto / Digital Assets: Bitcoin (BTC) is likely to behave as a risk-on asset, potentially rising with the general positive economic sentiment, especially if it aligns with tech stock performance and increased liquidity expectations. Short-Term Watchlist: BTC/USD price action, correlation with US equity markets. Medium-Term Focus: Regulatory news affecting digital assets, macro liquidity conditions.
• Cross-Asset Correlations and Systemic Risk: Normal correlations are likely to hold, with equities and commodity prices rising alongside a strengthening USD, while bond prices may fall. Systemic risk appears low given the positive economic projection. Short-Term Watchlist: Equity-bond correlation, USD correlation with risk assets. Medium-Term Focus: Central bank balance sheet trends, overall market liquidity.
• Retail Sentiment / Market Psychology: Retail sentiment is likely to be positive, potentially increasing participation in growth-oriented assets. Social media trends may highlight specific sectors benefiting from increased capital spending. Short-Term Watchlist: Retail trading volume in relevant sectors, social media mentions of economic indicators. Medium-Term Focus: Investor confidence surveys, potential for coordinated retail pushes in response to economic optimism.