- Trump Trades Gain Momentum as US Stocks, Yields Up: Markets Wrap
A slew of trades around the world tied to Donald Trump’s rising presidential prospects notched decisive
moves, with stock futures extending gains, Treasury yields jumping and the dollar up the most since February.
S&P 500 futures climbed 1.2%, 10-year yields surged 12 basis points to a four-month high of 4.39%
and Bitcoin spiked to a record – moves that reflect rising wagers on a Trump presidency, with Vice
President Kamala Harris’s path to victory narrowing. - Dow rallies 400 points, S&P 500 gains 1% as traders await U.S. election results
The S&P 500 rose solidly on Tuesday in a broad rally for stocks as traders awaited the results from a high-
stakes U.S. presidential election. The benchmark index gained 1.23% to close at 5,782.76. The Nasdaq
Composite advanced 1.43% to 18,439.17. The Dow Jones Industrial Average climbed 427.28 points, or 1.02%,
and settled at 42,221.88. - Oil falls on stock build, firm dollar ahead of US election results
Oil prices fell more than 1% on Wednesday as the dollar firmed on market bets the U.S. presidential election
could swing in Republican Donald Trump’s favour though the race was still too close to call, and as U.S.
crude stocks rose more than forecast. Brent crude oil futures was last down 90 cents, or 1.2%, to trade at
$74.63 per barrel at 0450 GMT, while U.S. West Texas Intermediate (WTI) crude lost 82 cents, or 1.1%, to
trade at $71.17 per barrel. - Gold holds steady as market awaits U.S. election outcome
Gold held steady on Wednesday as investors keenly awaited the outcome of a tightly contested U.S.
presidential race. Spot gold held its ground at $2,740.61 per ounce. Bullion hit a record high of $2,790.15 last
Thursday. U.S. gold futures was marginally lower at $2,749.10 per ounce. Republican Donald Trump won 14
states in Tuesday’s U.S. presidential election while Democrat Kamala Harris captured four states and
Washington, D.C., Edison Research projected, but critical battleground states were unlikely to be called for
hours or even days. It’s 95% about the U.S. election this week, with a 5% splash of the Federal Reserve to add
a touch of spice, said Kyle Rodda, financial market analyst at Capital.com. - Uneven Recovery in Swing-State Economies Hangs Over US Election
Campaigns and pundits have spent months obsessing over polls and other data that offer clues as to how
people in the seven states most likely to decide the 2024 US presidential election will vote. It’s the economics
in each of those battlegrounds that may matter most. As a whole, the US economy has staged a remarkable
— albeit inflation-tainted — recovery from the 2020 recession brought on by the Covid pandemic. Data
released in the past week pointed to continuing strong growth even if temporary factors like hurricanes and
strikes have hit the labor market. - PBOC Head Vows to Boost China Countercyclical Monetary Measures
China’s central bank chief pledged to maintain an accommodative monetary policy stance and to double
down on countercyclical adjustments to support the country’s economic growth. In a report on the nation’s
financial work to China’s top legislative body, the National People’s Congress Standing Committee, People’s
Bank of China Governor Pan Gongsheng on Tuesday suggested that keeping an accommodative monetary
policy stance and increasing the intensity of countercyclical adjustments will create a sound monetary and
financial environment for stable economic growth and high-quality development, the official Xinhua News
Agency reported. - Chinese State Media Blasts ‘Unprecedented Chaos’ of US Vote
After months of relative silence, Chinese state media is starting to unspool its narrative on the US presidential
election, deriding this year’s voting season as a money burning display of unprecedented chaos. State
broadcaster China Central Television helped lead the charge on Monday, choosing to spotlight the months of
pre-ballot drama rather than contrasting the policies of Donald Trump and Kamala Harris. - U.S. dollar climbs overnight as speculation grows Trump in election lead
The U.S. dollar strengthened against the Mexican peso and other major global currencies overnight as
presidential election results came into focus. The greenback had gained 3% against the Mexican peso shortly
before 11:30 p.m. ET, and was also higher against the Swiss franc, Japanese yen and Chinese yuan. The ICE
U.S. Dollar Index rose 1.4%, hitting its highest level since at least July. The euro fell to 1.0755 against the
dollar and lowest level since at least July 3 during the trading session. - Bank stocks advance in overnight trading as traders bet on less regulation in a Trump presidency
Shares of major banks climbed in overnight trading as investors expected Donald Trump’s victory in the
presidential election. Citigroup jumped about 5% in special late trading on the Robinhood brokerage for well-
known stocks. Bank of America added more than 3%, while Wells Fargo and Goldman Sachs each popped
more than 2%. These moves come as traders followed results trickling out on the race for the White House.
Former President Donald Trump is currently leading by NBC News’ count, though several key states have yet
to be called. NBC did project Trump to win swing state North Carolina. Bank stocks are expected to benefit
under GOP control given the party’s posture toward deregulation. TD Cowen analyst Jaret Seiberg noted a
pullback on Consumer Financial Protection Bureau oversight can particularly benefit finance names. - China consumer slowdown weighs on U.S. earnings again
Apple, Starbucks, Nike and LVMH are seeing falling China sales as the economy continues to falter. Tesla, as
well as athleisure brands Adidas and Lululemon, are some of the rare companies still seeing a bright spot. - The U.S. election is a make-or-break moment for aid to Ukraine
Ukrainian officials are likely watching U.S. polls with more than a touch of nervousness this week, as the vote
remains too close to call. After almost three years of fighting, there’s no doubt that funding fatigue is setting
in among Kyiv’s biggest military backers, particularly the U.S. Analysts say that funding for Ukraine could
decline, no matter who between Republican Donald Trump and Democrat Kamala Harris enters the White
House. - Tesla jumps in overnight trading as Trump-backer Musk seen benefiting
Shares of Tesla surged overnight as investors bet a potential Donald Trump election victory would benefit
major backer and CEO of the carmaker, Elon Musk. Tesla shares jumped 8% in overnight trading on
Robinhood brokerage platform. Last month, Musk donated almost $75 million to America PAC, which is the
super political action committee that he established earlier in the year to support the Republican
nominee. Trump has promised to appoint Musk as the head of a government efficiency commission, if
elected. During his speech at Trump’s Madison Square Garden rally in late October, the SpaceX owner said he
could cut $2 trillion from the federal budget in that role. - AstraZeneca Plc shares fell 8.4% amid escalating concerns over a Chinese probe into the UK drugmaker
Traders cited a report from the Yicai news service released earlier in the day, with the stock’s losses
snowballing during afternoon trading. AstraZeneca said it doesn’t comment on speculative media reports
including those related to ongoing investigations in China. The company said it will fully cooperate with
Chinese authorities if requested, in a statement. Astra’s local president Leon Wang is under investigation and
is cooperating with authorities, the drugmaker has said. Bloomberg has previously reported that the
investigation is focused on aggressive sales tactics used for at least two of its oncology drugs, the lung cancer
treatment Tagrisso and the immunotherapy Imjudo. The inclusion of Wang in the probe was seen as a
significant escalation of the investigation and as a sign that Beijing is widening its scrutiny of Astra’s
operations in mainland China. The Yicai report suggests that the investigation has broadened further. Astra
generated about 13% of its sales in China in 2023. - Engine manufacturer Cummins climbed 8.9% after posting 3Q profit and sales that beat estimates.
Management now sees year Ebitda at the high end of prior guidance
THIRD QUARTER RESULTS: Net sales $8.46 billion, +0.3% y/y, estimate $8.29 billion. Ebitda $1.39 billion, +13%
y/y, estimate $1.27 billion. Adj. EPS $5.86 vs. $4.59 y/y, estimate $4.81. YEAR FORECAST: Sees Ebitda +15.5%,
saw +15% to +15.5%. Still sees revenue -3% to 0%.The 3Q earnings per share of $5.86 increased from $4.59 in
the year-ago period, driven by the benefits of pricing, operational efficiency and the absence of Atmus
separation costs. Jefferies analyst Stephen Volkmann writes that results were also helped by a lower tax rate,
which added 26c a share to the earnings beat. Highlights in 3Q revenue came from power systems division
and the distribution segment. Power systems sales increased 17% from the year earlier period. In that
division, power generation revenue increased 24%, fueled by demand in the data center market. Distribution
segment sales increased 16%. - Almost 10 months after a scandal that shook Archer-Daniels-Midland Co., the commodity-trading giant
is still struggling to sort out its accounting
ADM, which in March adjusted its financial disclosures going back to 2018, said late Monday that it found
more errors in the way it reported transactions between its business units. The crop trader said it will restate
results for last year and the first and second quarters of 2024. The move prompted ADM to cancel its
quarterly earnings call with analysts only 14 hours before it was due to start. The company said it will make
the formal corrections as soon as reasonably practicable, and it doesn’t expect any material impact from the
changes. But even as the financial impact of the errors on consolidated earnings have so far been minor, the
broader consequences could be significant as investors lose confidence in the company. ADM has erased
almost $12 billion in market value since the accounting issues first became public in January. The stock fell
12% further Tuesday. The scandal has drawn investigations by the Department of Justice and Securities &
Exchange Commission, and the company removed Vikram Luthar from the Chief Financial Officer role. The
renewed accounting issues come at a time when ADM is struggling with a drop in crop prices around the
globe and lower profits from processing soybeans into meal and oil — a key earnings driver amid increased
crushing capacity in the US. A surge in imports of ingredients such as tallow and waste oil has also impacted
demand for soybean oil for biofuel production. ADM closed its only soybean crushing facility in Iowa for
maintenance during the current harvest of a record US crop, further eroding its ability to gain from
processing. - Super Micro Computer Inc. gave a sales forecast that fell short of analysts’ estimates while saying it
couldn’t predict when it would file official financial statements for its previous fiscal year. Shares fell 15.9%
in afterhours trading
The embattled server maker missed an August deadline to file its annual financial report and last week its
auditor, Ernst & Young LLP, resigned, citing concerns about the company’s governance and transparency. An
investigation of the accounting issues by a special board committee found no evidence of fraud or
misconduct on the part of management or the board of directors, Super Micro said Tuesday. Revenue will be
$5.5 billion to $6.1 billion in the quarter ending in December, the company said. Analysts, on average,
projected sales of $6.79 billion. Profit, excluding some items, is expected to be 56 cents to 65 cents per share,
compared with 80 cents anticipated by analysts. For the quarter that ended in September, Super Micro said
preliminary results show sales of $5.9 billion to $6 billion. Analysts, on average, estimated $6.47 billion.
Profit, excluding some items, was about 76 cents per share, the company said. Wall Street expected 74 cents.
The results could change upon review by a new accounting firm, Chief Financial Officer David E.
Weigand said. Sales were hurt in the fiscal first quarter by the availability of semiconductors, Chief Executive
Officer Charles Liang said. When asked on a conference call whether the company’s accounting issues had
affected its relationship with Nvidia Corp., which is the top producer of powerful processors for artificial
intelligence, executives said the chipmaker hasn’t made any changes to Super Micro’s supply allocations.
Tuesday’s update was the company’s opportunity to ease investor fears. N Quinn Bolton, an analyst at
Needham, suspended his rating of Super Micro after the resignation of E&Y. In a note ahead of the event, he
said the update from Super Micro could provide an opportunity to reassess the suspension. Instead, investors
appears disappointed with the results. - Nvidia passes Apple as world’s most valuable company
Nvidia passed Apple in market cap on Tuesday to become the most valuable publicly traded company in the
world. The stock price has nearly tripled so far in 2024 as demand continues to swell for the company’s
graphics processing units. Nvidia briefly topped Apple in June. - Toyota posts first quarterly profit drop in two years
Toyota Motor posted its first quarterly profit drop in two years on Wednesday, as slowing sales and
production volume stalled the Japanese automaker’s recent record run. Toyota’s operating profit for the
three months to end-September totalled 1.2 trillion yen ($7.81 billion), down 20% from 1.4 trillion yen a year
earlier and largely in line with the 1.2 trillion yen profit estimate average of nine analysts polled by LSEG. The
world’s top-selling automaker maintained its profit forecast for the current year at 4.3 trillion yen. In recent
quarters it has delivered hefty profits thanks to demand for its hybrids in the United States and other big
markets. The result comes after recent sales and output figures had already pointed to a modest slowdown
for Toyota, in part due to heavy competition from Chinese brands in China and a now-solved production
suspension of two models in the United States.
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