US equity funds record $140bn of inflows after Trump’s election win

Good morning. Today’s newsletter will cover:

• The billions of dollars poured into US stocks in anticipation of Trump’s sweeping tax cuts

• How the shooting of a UnitedHealth Group executive has triggered concerns around corporate security

• A Texas judge rejecting Boeing’s guilty plea agreement stemming from twin crashes of the 737 Max

Investors have pumped nearly $140bn into funds made up of US stocks. The rush of buying made November the busiest month for inflows on records stretching back to 2000.

Driving the buying spree are traders betting Donald Trump’s administration will unleash sweeping tax cuts and reforms in a boon to corporate America.

The president-elect has also vowed that his government will seek to cut regulations and taxes as part of an agenda aimed at boosting growth.

The S&P 500, Wall Street’s main equities barometer, has risen 5.3 per cent since election day, bringing its gains for this year to 28 per cent. Smaller companies, which are seen as more sensitive to fluctuations in the US economy, have performed even better since the election, with the Russell 2000 last week hitting a record high for the first time in three years.

Strength in the US disguised weakness elsewhere, with investors pulling money from other markets seen as more vulnerable to a potential trade war.

Funds that invest in emerging markets have suffered net withdrawals of $8bn since the election, including about $4bn exiting China-focused funds. Those that invest in western Europe have lost about $14bn and Japan-focused funds have lost around $6bn, according to data provider EPFR.

“When there is geopolitical risk in the world the US is a safe haven, even if they’re the cause of that geopolitical risk, ironically,” said Dec Mullarkey, managing director at fund manager SLC Management. Read more about the rally here.

For more on markets from Rob, sign up for the Unhedged newsletter here if you’re a premium subscriber or upgrade your subscription here. Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: The Bureau of Labor Statistics releases jobs data for November

• Elections: Ghana holds presidential and parliamentary polls tomorrow. Romania has a presidential run-off vote the next day, tainted by official accusations of Russian meddling.

• Fedspeak: Michelle Bowman is due to speak at the Missouri Bankers’ Association executive management conference

Join us next Wednesday as Financial Times editor Roula Khalaf and other FT experts discuss their predictions for the world in 2025. Register here.

Five more top stories

1. The shooting of a UnitedHealth executive in Manhattan has triggered broad concerns about corporate security, with large companies rushing to assess whether their top employees have sufficient protection. Security chiefs of groups on both sides of the Atlantic are sharing intelligence and making inquiries with specialist companies on how to shield top executives.

• ‘Deny’, ‘defend’, ‘depose’: New York detectives are investigating inscriptions of words on bullet casings left at the scene of executive Brian Thompson’s murder.

2. A US judge has rejected Boeing’s guilty plea agreement stemming from twin crashes of the 737 Max, citing diversity, equity and inclusion considerations in selecting a corporate monitor to oversee compliance with the deal. A judge in Texas said using the criteria would “undermine confidence” that the selection was based on competency.

• DEI pullback: US companies are accelerating their retreat from such initiatives amid an all-out assault from conservatives emboldened by the election of Donald Trump.

• ‘Anti-woke’ ETF: A new fund aiming to punish companies focused on DEI is making Starbucks its first target.

3. The leader of South Korea’s ruling party Han Dong-hoon has called for President Yoon Suk Yeol to step down immediately after saying he is worried Yoon could attempt to impose martial law again. Han had previously pledged to support Yoon in an impeachment vote scheduled for Saturday but said he had changed his stance. Read more here.

4. Donald Trump has named venture capitalist David Sacks as the White House’s artificial intelligence and cryptocurrency tsar. Sacks, a confidant of Elon Musk, was one of the earliest and most vocal Silicon Valley supporters of Trump, hosting a fundraiser for the candidate in San Francisco in June. Here’s what we know about the former PayPal executive.

5. Emmanuel Macron has vowed not to step aside before the end of his term, saying opposition parties “chose chaos” by bringing down his premier in a historic no-confidence vote. The French president’s term runs until 2027, but the ousting of Michel Barnier’s government is fuelling opposition calls for him to step down early.

How well did you keep up with the news this week? Take our quiz.

The Big Read

Is China’s manufacturing juggernaut running out of road? Donald Trump’s return will pose one of the sternest tests yet for the country’s formidable export sector. As domestic demand suffers from a deep property slump, Beijing is under pressure to rethink the economy’s increasing dependence on outbound trade.

We’re also reading . . . 

• Global chip war: The race for semiconductor dominance has entered murky waters as the industry ponders tariffs and more under Trump 2.0, writes Chris Miller, author of Chip War.

• ‘Chancellor of peace’: As the war in Ukraine drags on, Germany’s Olaf Scholz is trying to paint his rivals as warmongers ahead of a snap vote in February.

• Sick man of Europe? Data shows a narrative about Britain’s illness-related inactivity crisis seems wrong or at best overrated, writes John Burn-Murdoch.

• Intel turmoil: After a riotous week at one of the world’s leading chipmakers, is the company’s ambitious transformation plan too much?

Chart of the day

Donald Trump, a self-described “Tariff Man”, will find import taxes a clumsy and often ineffective way of asserting American power, writes Alan Beattie. Quite simply, the US just isn’t that big in global trade any more.

The FT’s Women of 2024

From Charli XCX of “brat” fame to Europe’s former competition commissioner Margrethe Vestager, we celebrate the women who are remaking the world we live in today. Read FT Weekend’s list of 25 of the world’s most influential women, written by the world’s most influential women.