Impact of Trump's victory on global stock markets, panic in Europe, company news
Stock market news
• US stock market rocket after the "red wave". Growth by 3% - as Goldman Sachs promised in such a case. Small-cap stocks are leading the growth - investors are counting on onshoring. S&P 500 showed the highest growth in history on the day after the elections.
LLY, real estate and defensive XLP and XLU were in the minuses due to rising interest rates and investors going on the attack.
Long-term US government bonds fell sharply - investors are afraid of inflation.
The US dollar rose sharply in response to rising yields, crushing gold.
Bitcoin updated its historical maximum of $76 thousand.
The Mexican peso and Chinese yuan fell due to expectations of a new wave of the US trade war against Mexico and China.
Markets are calm in the morning. So far, this has been a one-day reaction to the elections.
• The German auto industry is not happy about Trump's victory. BMW shares are down 7%, Mercedes by 6%, Porsche by 5%, Volkswagen by 4.4%.
• The state of German politics should become clearer on Thursday when Friedrich Merz, the leader of the opposition conservatives, gives a morning press conference in response to Chancellor Olaf Scholz's plea for support for a budget and increased military spending. It comes a day after Scholz sacked Finance Minister Christian Lindner of the Free Democrats (FDP) following a protracted budget row, leading to the collapse of the three-party governing coalition and setting the stage for snap elections early next year.
• The political uncertainty in Europe's largest economy could not come at a worse time for the bloc, which on Wednesday woke up to the real possibility of a Republican victory under Donald Trump, which could inevitably bring the threat of a sweeping 10% tariff on European goods. Germany, whose main export market is the United States, would be particularly vulnerable, especially since Trump has imposed much higher tariffs on cars. Stock markets reacted quickly, with the pan-European STOXX 600 index down 0.54% and Germany's DAX down 1.13%.
• Politics is set to take centre stage on Thursday alongside monetary policy, with the US Federal Reserve, the Bank of England, Sweden's Riksbank and Norway's central bank all set to announce their interest rate decisions.
• The Fed is still widely expected to cut rates by a quarter percentage point at this meeting, but investors will be interested to hear what Chairman Jerome Powell has to say about the risks of higher inflation from Trump's proposed tariffs and immigration policies.
• The Bank of England is also set to cut rates by a quarter of a percentage point, but markets are again looking for clues as to the extent to which policymakers think the government's new budget will ease price pressures.
• Most analysts expect the Riksbank to cut rates by half a percentage point, while Norges Bank is expected to keep its rate on hold.
• Many European Central Bank officials will also speak today, including hard-line policymaker Isabel Schnabel, whose recent comments have called for a slow pace of rate cuts. ECB chief economist Philip Lane is speaking in Athens, while Dutch central bank governor Klaas Knot will be interviewed by students at the University of Amsterdam. ECB board member Frank Elderson is taking part in a panel discussion in Brussels. The health of the German economy will be illustrated by trade and industrial production data today, as well as eurozone retail sales and house price data from Halifax, UK.
• Notion has announced a new email app with AI capabilities and powerful personalization capabilities. Mail by Notion, scheduled to launch in early 2025, will allow users to create their own unique inbox experience with personalized layouts and actions.
• Electricity prices are rising in Europe due to the need to use expensive gas to compensate for the shortage of wind generation.
• Gold fell as the dollar strengthened sharply after Trump's victory in the US presidential election. Gold prices fell 1.5%.
• The new US Congress is the most pro-cryptocurrency in history - Coinbase CEO More than 219 pro-cryptocurrency candidates have been elected to the House of Representatives and the Senate, and the number continues to grow.
• Tesla shares are up 15% since Trump's victory was announced. Crypto stocks have soared even more - COIN +31%, MARA +19%, MSTR +13%. And green energy stocks have fallen - FSLR -10%, ENPH -17%.
• Shares of U.S. banks including Citigroup, JPMorgan Chase and Goldman Sachs Group rose sharply by 8-13% as investors bet that Trump will follow through on his promises to cut taxes and reduce regulation for the industry.
• Major Chinese stocks listed on US exchanges fell after Trump's decisive election victory.
• Credit markets are rising around the world after Donald Trump won the US presidential election, signaling investor support for expected tax cuts and relief that the outcome of what had previously been seen as a dead heat was now clear.
• Lamborghini revenue jumps 20% on strong demand across all models. Italian luxury sports car maker Lamborghini reported nine-month revenue on Wednesday that rose 20% to 2.43 billion euros ($2.60 billion), thanks to a strong order backlog and strong demand across all models.
• Commodities fell overall, with prospects that a stronger dollar and potential trade disputes under Donald Trump's presidency will weaken the appeal of commodities in global markets.
• Donald Trump's election as US president could mean the Fed won't cut interest rates as much or as quickly as previously expected.
A series of new policies after he takes office are expected to put a stop to the decline in inflation. When he was in opposition, Trump said the Fed shouldn't cut rates. Now, however, he is likely to say the opposite.
• JPMorgan Chase CEO Jamie Dimon will remain at the bank and has no plans to join Donald Trump's administration, despite questions about whether he will take a senior government position.
• Thousands of US election punters are eyeing a potential payout of around $450 million from online betting sites, with the biggest bets being placed on Trump.
• U.S. Treasury yields have risen, with 30-year bonds up the most since the global flight to cash in March 2020, as investors again bet that Trump’s return to the White House would lead to higher inflation.
Experts debate how high yields could go. Ed Yardeni says “bond vigilantes” could push 10-year yields to 5%. Others are talking about 4.5-5%.
• Green energy stocks fall after Trump win Trump promises to increase fossil fuel production and roll back his predecessor's green agenda.
• Trump is expected to roll back some antitrust efforts pursued during the Biden administration, including an effort to break up Alphabet's Google over its dominance in online search.
• Costco's (COST) sales were slightly weaker in October due to hurricanes. Sales rose 7.2% year over year in the four weeks ended Nov. 3.
Same-store sales rose 5.1% in that time, while e-commerce sales rose 19.3%.
The stock is neutral.
• CVS shares rose 11% yesterday following the report.
• Shares of Trump's social network are falling by 8% in the post-market. And in stock trading they lost almost all of their morning growth of 35%, ultimately rising by only 6%.
The classic rule of Sell the fact worked.
• CVS appoints former UnitedHealth executive to lead Aetna's insurance unit.
• Yields surge as Trump's victory stirs up bond warriors.
• Trump's return will slow, not stop, the US clean energy boom.
• The U.S. Supreme Court will hear Facebook's attempt to avoid a securities fraud lawsuit.
• Sources say Swiss company Julius Baer is planning to sell its Brazilian operations.
• JPMorgan CEO Dimon will remain at the bank and has no plans to take a government position, a source said.
• De Guindos says disinflation in eurozone is on track.
• Europe must not relax banking regulations, top watchdog says
• Lagarde said that "truly European" banks were needed to be effective.
• MarketAxess beats quarterly earnings estimates on strong bond trading.
• Italian company Anima's profits rise thanks to acquisitions that boost revenue.
• Sampo beats third-quarter profit forecast on strong UK business.
• UniCredit CEO pushes merger prospects as he outbids Commerzbank
• Credit Agricole and Credit Suisse lose in court over EU cartel fines.
• Worldline is bringing in bankers to sell its Mobility unit, sources say.
• Software company Trimble raises full-year forecast again after beating third-quarter results.
• Lyft is partnering with Mobileye and others to bring robotaxis to its taxi platform.
• MarketAxess beats quarterly earnings estimates on strong bond trading.
• Iron Mountain's FFO rose in Q3 on strong data center demand.
• Super Micro falls on weak outlook, uncertainty in annual report fuels investor jitters
• Sources say Apple faces fines under landmark EU Digital Markets Act
• The CEO of Germany's SAP said he would hire "over-proportionately" in India.
Stocks after reports
APP +29%
LYFT +20%
Z +14%
ELF +7%
QCOM +6%
GILD +3%
TTWO +4%
ALB -3%
ARM -5%
SEDG -22%
Key events likely to impact markets on Thursday:
- CDU leader Friedrich Merz's press conference
- Bank rate decisions - Fed, Bank of England, Riksbank, Norges Bank
- German trade and industrial production data (all for September)
- Eurozone retail sales (September)
- House prices in Halifax, UK (October)
Fundamental news
• Trump's inauguration will take place on January 20, 2025, - Voice of America. We are interested in the composition of the next White House administration.
• Republican U.S. House Speaker Mike Johnson easily won reelection in Louisiana's 4th District, securing a fifth term in Congress - The Hill. It looks like Republicans will take control of both houses of Congress. With a Republican president, it's called a "red wave."
• The German Defense Minister is alarmed by the underfunding of the Bundeswehr in the face of the growing Russian threat. The threat from Russia is growing, and Germany's defense budget for 2025 is short by about 6 billion euros. In this situation, it is necessary to show "state responsibility" and not engage in "tactical games."
• Europe must have its own army in case the US stops maintaining security on the continent - Luxembourg Prime Minister Luc Frieden. Since 2007, there have been 1,500-strong combat groups in Europe, but they have never been deployed.
He stressed that the current situation does not provide Europe with the "necessary level of security". Therefore, it is necessary to start thinking about a European army.
• Scholz dismisses German Finance Minister Lindner - Die Welt. Scholz also plans to address the Bundestag with a vote of confidence in January. This could pave the way for early elections in March.