Trump Trade and Inflation Data Expectations, Corporate and Fundamental Reviews

Stock market news

• Many of Asia's biggest stock indexes fell nearly 1% or more, including Japan's Nikkei, South Korea's Kospi and Australia's stock index. Hong Kong's Hang Seng fell 0.6%, but had halved earlier in the session. Wall Street futures point to further weakness after Tuesday's pullback, with pan-European STOXX 50 futures also lower.

• Investors are waiting for US inflation data to be released today. For now, everything is calm. Bitcoin exceeded $90,000 for the first time overnight, but it quickly returned to $87,000.

• The dollar hits a two-year high. And gold fell to its lowest in more than seven weeks. The market rally that sent stocks to a series of all-time highs has run its course. Traders on Wall Street are awaiting key inflation data and more clues about Donald Trump's presidential transition.

• The market's broad bets on big spending, tax cuts and tariff hikes under new U.S. President Donald Trump, collectively known as the "Trump trade," took a pause on Wednesday as traders turned their attention back to economic data.

• The dollar has risen sharply and Treasury yields have risen sharply since last week’s election, while market odds for a rate cut at the Fed’s next meeting in December have fallen to just 62%, from 77% a week earlier and 84% a month earlier, according to CME Group.
Potentially important U.S. consumer price index data is due Wednesday that could either bolster or reverse the trend in interest rate cut expectations, setting up a busy few days that include U.S. manufacturer inflation data and comments from Fed Chairman Jay Powell on Thursday, as well as retail sales data on Friday.

• Powell pledged last week to stick to a cautious, patient easing of monetary policy, saying the central bank would not “guess” Trump’s policies or their impact on the economy. Whatever Trump’s agenda, it will be easy to push through Congress because Republicans appear to have won a majority in the U.S. House of Representatives, marking a sweeping victory for the government. This week, some of the contradictions in Trump’s various deals, which sometimes work in conflict with one another, became more apparent.

• Gold prices have hit several record highs in a row this year, partly on bets on higher inflation and government borrowing under Trump, but their gains have been capped by a strong dollar. The U.S. currency is near a one-year peak against the euro and a multi-month high against the yen, supported largely by a jump in U.S. yields. But rising borrowing costs tend to make equity investors nervous and put particular pressure on soaring tech and other growth stocks.

• Instagram Adds Photoshop Feature (ADBE) The social network has added a copy of the hyped functionality from Photoshop, and now you can expand horizontal photos using AI.

• Tether has “printed” another 2 billion USDT on the Ethereum network to replenish reserves, confirmed the company’s CEO Paolo Ardoino.

• BYD continues to dominate the new energy vehicle (NEV) market, reaching a record 36.1% market share in October.
Tesla China has lost significant ground, falling to seventh place with a market share of just 3.4%.

• Amazon is stepping up its efforts to develop its own AI chips in an attempt to compete with market-dominant Nvidia - FT

• Alibaba has introduced a new AI tool, Accio, for small businesses in Europe and the Americas. It uses data from 50 million businesses on the Alibaba International platform and covers more than 1 billion products in more than 100 markets.

• Thanks to Accio, businesses can discuss procurement details directly with suppliers, which makes the search process more efficient, the developers note.

• Global exchange-traded funds attracted a record $1.4 trillion in investment in the first 10 months of 2024, surpassing the previous annual record of $1.33 trillion set for all of 2021, - FT. The US paid $1.16 trillion in interest on its government debt at an average rate of 3.32%. This interest provided liquidity to investors.

• The US has unveiled a plan to triple nuclear power by 2050 as demand grows. "By mid-century, the US will deploy an additional 200 gigawatts of nuclear power capacity through new reactors, plant restarts and upgrades to existing facilities."

• Activist investor Elliott Management has reportedly amassed more than $5 billion in Honeywell (HON) shares. Elliott is pushing for a Honeywell breakup, which would allegedly boost HON's stock price by 75%.

• The U.S. has filed a lawsuit to block UnitedHealth's $3.3 billion purchase of Amedisys. "Eliminating competition between UnitedHealth and Amedisys would harm patients who receive home health and hospice services, insurers who contract for home health services, and nurses who provide home health and hospice services," the department said in a statement.

• Trump vowed to “save TikTok.” What happens next is less clear. After a tumultuous year filled with worries and legal battles over TikTok’s future in the U.S., TikTok may have been given a lifeline.

• Hertz Global Holdings (HTZ) shares rose 9% after the company reported a worse-than-expected loss tied to its failed bet on Tesla electric vehicles.

• Alphabet's (GOOG) Waymo is launching an autonomous ride-hailing service in Los Angeles. Waymo closed a $5.6 billion funding round last month as automakers and tech companies bet big on self-driving technology to fuel future growth.

• ValueAct Capital has bought a $1 billion stake in Meta Platforms but is not yet pushing for big changes at the parent company of Facebook and Instagram, a source familiar with the matter told Reuters on Tuesday.

• Fed's Waller: Stablecoins could benefit the financial system He said Tuesday that stablecoins are effectively "synthetic" dollars that could benefit the financial system.

• Tyson sees profit rise through 2025 as chicken offsets beef losses. Tyson Foods shares rose the most in two years after beating fiscal fourth-quarter profit estimates and forecasting stronger results next year, with a turnaround in its chicken business offsetting losses in beef.

• Shopify shares soared after the company said it would maintain strong sales growth during the holiday shopping season. The Canadian e-commerce company's strategy to attract more business is paying off.

• Pfizer considering selling drug unit. Pfizer is considering selling its drug unit, sources say, as the drugmaker, under pressure from activist investor Starboard Value, looks to shed non-core assets.

• Space startup Firefly has been valued at more than $2 billion in its latest funding round. Venture capital firms are investing heavily in rocket and satellite makers, marking a change in investment trends in such capital-intensive businesses.

• Jeff Bezos sold $1.2 billion worth of Amazon shares, bringing his November sales to nearly $3 billion.

• RIVN shares rise 9% in premarket trading. Rivian Automotive and Volkswagen Group have launched a massive joint venture, promising to join forces to create “cutting-edge” electric vehicle technology.

 • Brazil's retail sales rose less than expected in September.

• Musk's Starlink is working to secure Indian approval for satellite broadband.

• Baidu expands AI solutions with advanced text-to-image technology and no-code app builder.

• Tyson Foods forecasts pessimistic full-year earnings due to lower pork prices and slowing demand for chicken.

• Zegna's controlling family shareholder increases its stake in the group.

• TSX futures fall on falling metals prices.

• Shopify Gives Optimistic Holiday Outlook as AI Attracts Customers, Shares Rise

• Futures retreat from post-election readings as focus shifts to economic data.

• The EU has demanded that Apple stop geo-blocking services such as the App Store.

• Wall Street bonuses to rise for first time since 2021, consultant says

• Elliott calls for Honeywell breakup, acquires stake worth more than $5 billion.

• German asset management company DWS appoints Vincenzo Vedda as Chief Investment Officer.

• Visa teams up with Affirm to launch flexible payments card in US

• SoftBank posts quarterly profit of $7.7 billion as Vision Fund gets back on its feet

• Brazil's BTG Pactual reports rise in quarterly profit.

• Abrdn sells software business as new CEO takes over

• Carlyle and Warburg are investment firms scouting talent in Japan amid deal boom.

• DBS Bank has nominated Rajat Verma as its next CEO in India, sources said.

• UK regulator fines Metro Bank $20m for control lapses

• Fed's Waller: Stablecoins Could Benefit the Financial System

• Stonepeak to acquire private credit investor Boundary Street Capital as part of artificial intelligence development project.

• Space startup Firefly valued at over $2 billion in latest funding round.

• Juniper Networks invests in artificial intelligence startup Recogni in a $102 million funding round. 

• Adobe adds artificial intelligence tools to its stock photography business.

• Amazon offers free computing power to AI researchers in bid to challenge Nvidia

• Netflix reaches 70 million ad-supported users.

• Meta will offer less personalized ads in Europe to appease regulators.

• The European calendar is packed, with financial firms ABN Amro and Allianz set to headline corporate earnings reports. The Bank of England's Catherine Mann will speak at a committee meeting today and could attract attention after sterling's sharp sell-off on Tuesday. But the bulk of the central bank's speeches will again come from Fed officials, with regional heads Alberto Musalem, Laurie Logan and Jeffrey Schmid set to take to the podium at separate events throughout the day.

Key events that could impact markets on Wednesday:
- US CPI (October)
- Dallas, St Louis and Kansas City Fed leaders to speak at separate events
- Bank of England Mann to speak

Fundamental news

• Marco Rubio will become the new US Secretary of State. 

• Elon Musk and Vivek Ramaswamy to lead Trump's "Department of Government Efficiency" (DOGE). With the goal of "dismantling government bureaucracy," the two billionaires will be tasked with cutting "unnecessary regulation" and "wasteful spending" and restructuring government agencies.
Musk: "It will send shockwaves through the system and to everyone involved in government waste, which is a lot of people."

• Some of Trump's top advisers are backing Scott Bessent, who runs macro hedge fund Key Square Group, as the top choice for Treasury secretary - Bloomberg

• The EU may increase supplies of liquefied natural gas in exchange for Donald Trump abandoning the idea of ​​high tariffs on European goods.

• Britain demands from Biden the $20 billion promised to Ukraine before Trump came to power and permission to go long-range - The Telegraph.
This concerns the US share of the $50 billion loan from the G7, which will be financed by income received from frozen Russian assets.

• The European Commission may redirect €392 billion from the bloc's budget to military spending - Financial Times. The policy change would affect about a third of the bloc's total budget, or about €392 billion, between 2021 and 2027.

• A court in China has sentenced Chen Jixiang, former vice chairman of the standing committee of the National People's Congress of Guangdong Province, to death for accepting bribes totaling about $38 million.
Xi Jinping has previously said that corruption is the main malignant tumor that threatens the vitality and fighting capacity of the Communist Party of China. He said the party will punish corruption with a "zero tolerance" principle.

• Lithuania denounced the customs agreement with Belarus. The customs cooperation agreement with Belarus was signed almost two decades ago.

• Women in the US are buying abortion pills en masse after Donald Trump's election victory - The Washington Post. They write that Aid Access, a major supplier of such pills, received 10 thousand requests in 24 hours after the election. This is 17 times more than usual.

• Early parliamentary elections in Germany may take place on February 23. This was agreed upon by the leaders of the CDU/CSU and SPD factions in the Bundestag, the dpa agency reports, citing sources in the parties. German Chancellor Olaf Scholz may bring the question of a vote of confidence in the government to a vote in the Bundestag as early as December 16.

• Households on average see inflation next year at 2.9%, down from 3.0% in September, according to a New York Fed survey. That's the lowest estimate for short-term price growth in four years, according to the Fed's survey.

• Prime Minister Justin Trudeau's government has tasked an independent labour council with ending lockouts at Canada's major ports, just as it did with the railways in August, to stem the country's economic collapse.