High volatility on the markets, growth of bitcoin and dollar, company news and Trump's steps

Stock market news

• US stock indices closed the day at zero yesterday. Semiconductors were hit by the sell-off. The Magnificent Seven were also sold, except for GOOG and TSLA. The latter jumped by 9% again. Small-cap companies also rose in price. Investors continue to buy stocks that they believe will benefit from Trump's election. Gold was hit by a sell-off of almost 3%. And Bitcoin set another all-time high above $89,000. Cryptos are waiting for the jubilee $100,000. In Japan and Hong Kong, stock indices are falling by 1-2%.

• Data provider DDHQ projected that the Republican Party had won a majority in the U.S. House of Representatives. Edison Research did not yet forecast control of the House. Edison Research projected that Republicans had already secured a majority in the U.S. Senate of at least 52-46. Control of both chambers would give the new administration the tools to pass legislation and implement fiscal policy, as investors look for tax cuts and looser regulations.

Bitcoin's run continues, with the world's most famous cryptocurrency hitting another all-time high near $90,000 and the dollar rising to a four-month high against its major rivals.  Optimism over friendlier regulation and a victory for cryptocurrency advocates in Congress have driven cryptocurrencies' sharp gains over the past week.

• Beneath the surface, worries about tariffs imposed by the Trump administration are weighing on non-U.S. stocks, the euro, the Chinese yuan and fiat stocks more broadly. Futures point to European bourses opening lower, while the euro remains at its lowest since April. The Chinese yuan fell to a 3-1/2-month low against the dollar on Tuesday. Stocks in Asia were the laggards, largely as tech stocks in Taiwan and South Korea suffered. Earlier this week, Reuters reported that the U.S. had ordered Taiwan Semiconductor Manufacturing Co to stop supplying advanced chips to Chinese customers that are often used in AI applications.

• The cryptocurrency market capitalization reached a historical maximum of about $3.1 billion.

• World diamond prices have reached multi-year lows - Rapaport (owns the largest diamond trading platform in the US). The price index for 1-carat stones as of November 1 fell by 22% compared to the same date in 2023 and by 23% since the beginning of the year. The price decline also affected smaller diamonds.

• Hedge funds that shorted TSLA shares have lost more than $5 billion since Donald Trump won the US election.

• FTX sues Binance for $1.8 billion.

• MicroStrategy (MSTR) bought about 27,200 bitcoins for about $2.03 billion, making it the largest purchase by a crypto hedge fund since it began buying the digital asset more than four years ago. The average purchase price is $74.6 thousand.

• Iron ore prices fall to $100 a tonne after China's new economic recovery measures disappoint investors, - BBG

• Hedge funds have increased their bullish positions on WTI crude significantly, the most since March, after OPEC+ delayed a planned output increase and tensions in the Middle East rose - BBG

• Donald Trump's victory in the US election has dealt a blow to the renewable energy industry, prompting at least half a dozen developers to pause projects and investors to sell shares.

• Chinese company Huawei Technologies seeks to dismiss criminal charges in the United States. Huawei asked a U.S. judge to dismiss most of a federal indictment.

• The dollar rose to a one-year high. Trump's victory in the White House continues to stimulate growth. And the euro fell against the dollar to a 4.5-month low.

• Brazilian aircraft maker Embraer plans to open an office in Europe as sales of its C-390 Millennium military transport aircraft gain momentum in the region.

• Cigna (CI) said it will not merge with rival insurer Humana, following reports that the two companies had resumed deal talks.

• Engines in 1.4 million Honda vehicles could fail. The U.S. government's Highway Traffic Safety Agency is investigating complaints that engines could fail in Honda and Acura vehicles.

• EU to invest $142m in Dutch photonic chip factories.

• Triton Partners is considering a takeover of Germany's Evotec SE. The private equity firm has become one of the drug developer's largest shareholders.

• South Korea's ruling party plans a chip law to thwart Trump's threat to give chipmakers subsidies and exemptions from a national cap on working hours.

• Amazon (AMZN) is developing glasses for drivers to shave seconds off delivery times, sources say. Amazon is developing smart glasses for its delivery drivers to guide them to, around and inside buildings in an attempt to smooth out the final leg of an order's journey to a customer's home. The next step appears to be robots trained on such videos.

• Chip manufacturing equipment maker ASMPT has completed takeover talks with a potential buyer - Reuters. The buyer's name has not been disclosed.

• China's semiconductor index jumped to a nearly three-year high on Monday, betting on a U.S. ban on Taiwan Semiconductor Manufacturing's shipments of advanced chips to China.

• Yardeni predicts S&P 500 to hit 10,000 (currently 6,000). 'Animal instincts are returning' after Trump win

• ADB steps up climate finance after US, Japan provide world's first sovereign guarantees

• Cigna says it has no plans to merge with Humana.

• Brazil's Lula calls on Congress to cut spending to help 'beat' financial markets

• Hedge funds are flocking to banks and abandoning green energy after the US election, according to Goldman Sachs.

• Tesla shares continue to rise as Musk-Trump alliance fuels rally

• Walmart and other U.S. retailers are importing fewer Christmas items ahead of a cool holiday season.

• Morning trading: dollar rises after elections, China fights deflation.

• Futures rise as post-election rally continues.

• "Blinders on," but be prepared: In 2016, the Fed took note of Trump's plans.

• New Schroders CEO shakes up top team after tough year

• Italy's Intesa partners with BlackRock in private banking in the Benelux countries.

• Australia close to deal with ANZ to end bank closures in Pacific region.

• SoftBank is expected to make $1.87 billion in profit from the IPO.

• Direct Line to cut 550 jobs over car insurance problems

• NatWest buys back £1bn of its shares, accelerating full privatisation.

• Genesis Capital has sweetened its offer to buy Australian dental clinic chain Pacific Smiles.

• ECB is pushing Raiffeisen and UniCredit to raise capital to cover Russian risk, sources say.

• Italy's Anima appoints Goldman to advise on Banco BPM bid review

• The source says Rehn is preparing for a new term as head of the Bank of Finland.

• Head of Volkswagen's investment arm leaves Northvolt board of directors.

• Bitcoin's surge has led to billions in losses for short-traders after Trump's victory.

• A web summit has kicked off in Lisbon, where technology leaders are discussing Trump's return.

• Abu Dhabi company to launch tokenized US Treasury bond fund

• EU to invest $142m in Dutch photonic chip factories.

• Japan has unveiled a $65 billion plan to help its domestic chip industry.

• Zeiss opens technology center in India to double workforce in 3 years.

• Meanwhile, investors will focus on the macro side, especially with U.S. inflation data due out on Wednesday. Traders have not yet fully priced in the Fed's 25 basis point rate cut next month, but data in the coming days will shape the rate path.

• UK labour market data is likely to weigh on sterling as the pound approaches a three-month low. It was last down 0.25% at $1.2838.

• In the corporate world, AstraZeneca's results are likely to be in focus as investors watch for comment on the drugmaker's troubles in China. AstraZeneca said last week that its China president, Leon Wang, had been detained by Chinese authorities and, while the reason for the detention is unknown, it does not believe it is related to a major health insurance fraud case involving the company.

Key events that could impact markets on Tuesday:
- Economic events: German CPI for October, UK labor data
- Earnings: Bayer AG, AstraZeneca and Vodafone

Fundamental news

• Trump is asking Representative Mike Waltz, a China hawk, to be his national security adviser. Waltz has accepted, and his Florida district will face new congressional elections. After Russia’s full-scale invasion, he called on Biden to give Ukraine more weapons to help repel Russian aggression. But last month, he said the U.S. should rethink its Ukraine goals: “Is this in America’s interest, or are we going to invest time, money, and resources that we desperately need in the Pacific right now?”
Waltz praised Trump for pushing NATO allies to spend more on defense. But he has not advocated leaving the alliance.

• CNN: Musk will not take a position in the Trump administration, his influence is already growing. According to the channel's sources, Trump offered Musk several positions, but the director of Tesla and SpaceX does not want to take any government position - this could limit his activities in his companies.
"Musk now has great influence on Trump. The businessman is regularly present at meetings with the politician and participates in personnel decisions," CNN notes.

• Donald Trump's first day: begin deporting migrants, pardoning Capitol rioters and firing thousands of government workers - Associated Press
"How many executive orders will be issued in the first week? There will be dozens. I can assure you of that," Caroline Levitt, a spokeswoman for the newly elected US president's campaign, told Fox News.

• Trump has announced his new "border czar." Former ICE director and deportation hardliner Tom Goman will be in charge of all border issues and the southern border.

• Shigeru Ishiba is likely to win approval from the lower house of parliament to remain Japan's prime minister, Nikkei reports. This is despite the Liberal Democratic Party losing its majority in parliament. The Japanese government has resigned ahead of the next prime ministerial election.
Japan's stimulus package will include steps to lower prices, NHK reports
Japan's new economic stimulus package will include cash payments to help low-income households cope with inflation, as well as additional funding for disaster preparedness.

• Greece and Turkey seek to resolve maritime border dispute. Greek Foreign Minister Giorgos Gerapetritis said there was a high level of trust between Greece and Turkey that made it possible to prevent crises even amid maritime border disputes. The comments came ahead of a visit to Athens by his Turkish counterpart Hakan Fidan.

• The Taliban will attend the UN climate change conference to ask for money because of global warming. The conference, known as COP29, starts in the Azerbaijani capital on Monday. Afghanistan's National Environmental Protection Agency said it was sending a delegation to Baku.

• There has been a sharp rise in the number of company failures in the UK after the Labour government cut tax breaks and increased taxes on owners.

• China is close to a record trade surplus. Bloomberg reports that China's trade surplus has soared to $785 billion in the first 10 months. If it continues to grow at its current rate, it will reach nearly $1 trillion. China relies heavily on exports to offset weak domestic demand. More and more countries are unhappy with this trend and are confronting China with tariffs. With its aggressive export policies, China is passing on its domestic economic problems to the rest of the world. The higher China's trade surplus, the more money it sucks out of other countries.