- Asian Stocks Rise as China Rebounds on Policy Help: Markets Wrap
Asian shares edged higher, following a rally in heavyweight Samsung Electronics Co. Ltd. and gains in Chinese
stocks on fresh signs of policy support. A key gauge of the region’s equities rose 0.2%, aided by Samsung
Electronics’ jump after South Korea’s biggest firm announced a surprise stock buyback plan. Shares in Hong
Kong and mainland China also advanced after the country’s securities regulator urged listed companies to
boost returns on their stocks. The brighter mood in Korea and China helped offset weakness in neighboring
markets like Japan and Taiwan, where concerns lingered about Donald Trump’s potentially inflationary
economic policies and Friday’s upbeat US retail sales data that reduced expectations for the Federal Reserve
to cut interest rates. - Dow closes 300 points lower Friday as rate worries hinder postelection rally
Stocks tumbled on Friday as the postelection rally fizzled and investors fretted over the path of interest rates.
The Dow Jones Industrial Average lost 305.87 points, or 0.70%, to end at 43,444.99. The S&P 500 slipped
1.32% and closed at 5,870.62, while the Nasdaq Composite fell 2.24% to 18,680.12. The major averages had
been coasting on a postelection rally since Trump’s victory at the polls, the three indexes touched fresh highs
on Monday, but the upward momentum has been slowing. The S&P 500 posted a weekly loss of 2.1%, while
the Nasdaq Composite slid about 3.2%. The 30-stock Dow fell 1.2% during the period. - Oil prices edge higher after Russia-Ukraine tensions escalate
Oil prices edged up on Monday after fighting between Russia and Ukraine intensified over the weekend,
although concerns about fuel demand in China, the world’s second-largest consumer, and forecasts of a
global oil surplus weighed on markets. Brent crude futures gained 20 cents, or 0.3%, to $71.24 a barrel by
0130 GMT, while U.S. West Texas Intermediate crude futures were at $67.11 a barrel, up 9 cents, or 0.1%.
In a significant reversal of Washington’s policy in the Ukraine-Russia conflict, President Joe Biden’s
administration has allowed Ukraine to use U.S.-made weapons to strike deep into Russia, two U.S. officials
and a source familiar with the decision said on Sunday. - Gold set for biggest weekly fall in 3 years as Fed rate-cut bets ease
Gold prices on Friday were on track for their biggest weekly decline in over three years as expectations of less
aggressive interest rate cuts by the U.S. Federal Reserve lifted the dollar, denting allure for bullion among
investors. Spot gold lost 0.1% to $2,562.59 per ounce. Prices have fallen more than 4% so far this week,
touching their lowest since Sept. 12 on Thursday. U.S. gold futures fell 0.2% to $2,567.20. The dollar was set
for its biggest weekly gain in more than a month, making gold more expensive for other currency holders.
U.S. Treasury yields, meanwhile, extended gains after data showed retail sales in the world’s largest economy
rose more than expected last month. - UK economy ekes out 0.1% growth in the third quarter, below expectations
U.K. economy grew less than expected in the third quarter of the year, showing only marginal growth
following a rebound at the start of the year, initial figures showed Friday. Gross domestic product came in at
0.1% in the three months to September compared to the previous quarter. That’s below the 0.2% growth
expected by economists polled by Reuters and follows an expansion of 0.5% in the second quarter of the
year. U.K.’s dominant services sector also grew just 0.1% on the quarter, the Office for National Statistics
said. Construction rose by 0.8%, while production slipped 0.2% in the month. It comes after inflation in the
U.K. fell sharply to 1.7% in September, dipping below the Bank of England’s 2% target for the first time since
April 2021. The fall in inflation helped pave the way for the central bank to cut rates by 25 basis points on
Nov. 7, bringing its key rate to 4.75%. The Bank of England said last week it expects the Labour Government’s
tax-raising budget to boost GDP by 0.75 percentage points in a year’s time. Policymakers also noted that the
government’s fiscal plan had led to an increase in their inflation forecasts. U.K. Finance Minister Rachel
Reeves said Friday she was not satisfied with the numbers. - Former French president calls for a united Europe after Trump election win
President-elect Donald Trump’s election win last week has fueled fears of an impending economic nightmare
for the European Union. François Hollande, the former socialist leader of France, led the nation between
2012 to 2017 and briefly crossed over with Trump’s first term. He recalled that Trump was often a man of his
word. - Xi Jinping’s olive branch to Trump comes with warning on China red lines
Xi Jinping used his final meeting with Joe Biden to send a clear message to Donald Trump: China wants to be
friends, but is ready for a fight if necessary. With Biden set to leave the White House in January, China’s
leader took Saturday’s meeting as a chance to spell out his approach toward Trump. That entails finding a
way for the world’s two biggest economies to get along, with Xi emphasizing that the US and China shouldn’t
fight a new Cold War, and a conflict between them isn’t inevitable. But he followed that up by reiterating
China’s four red lines, signaling that Trump must avoid any moves to undermine the Communist Party’s grip
on power, push the nation toward democracy, contain its economic rise or encourage independence in
Taiwan. Chinese state media including CCTV seized on the reference to four red lines, saying it set the agenda
for the future relationship. - Ukraine’s Allies Are Leaning on Zelenskiy for a Way to End the War
After almost 1,000 days resisting the Russian invasion, Ukraine’s allies are pushing Volodymyr Zelenskiy to
consider new ways to lure Vladimir Putin to the negotiating table as they seek an end to the fighting. Donald
Trump will return to the White House in January pledging a quick end to the war. German Chancellor Olaf
Scholz urged Putin to engage in peace talks during a phone call on Friday. France’s Emmanuel Macron said
Sunday that he’ll speak to the Russian leader when the time is right. Two European officials said there is an
increasingly recognition that Zelenskiy will have to compromise with Putin because it has become clear that
neither side can secure a decisive victory. - Russia pumping gas via Ukraine but volumes to Austria cut
Russian gas supplies to Austrian energy company OMV were halted hours after Vienna said Moscow had
given notice it would cut off flows. Russia, which before the Ukraine war was the biggest single supplier of
natural gas to Europe, has lost almost all of its European customers as the EU tried to reduce its dependence
and the Nord Stream gas pipeline to Germany was blown up in 2022. At its peak, Russia was supplying 35% of
Europe’s gas but since the 2022 war, Gazprom’s market share has been lost to Norway, the United States and
Qatar. - Alibaba ADRs fell 2.2% after the e-commerce giant reported second-quarter revenue that slightly
missed consensus estimates
SECOND QUARTER RESULTS: Revenue 236.50 billion yuan, +5.2% y/y, estimate 239.43 billion yuan. Total
Taobao and Tmall Group revenue 98.99 billion yuan, +1.4% y/y, estimate 99.07 billion yuan. Adjusted
earnings per American depositary receipts 15.06 yuan vs. 15.63 yuan y/y, estimate 14.93 yuan. Adjusted
Ebitda 47.33 billion yuan, -3.9% y/y, estimate 46.89 billion yuan. Adjusted net income 36.52 billion yuan,
9.1% y/y, estimate 35.62 billion yuan. Citi (buy): Analyst Alicia Yap says adjusted net profit slightly beat her
expectations, with the results overall being relatively in line with her forecast. Vital Knowledge: Adam
Crisafulli notes there was modest upside on EPS and Ebitda, but overall revenue fell short of expectations.
Says international digital commerce sales growth was higher than consensus had expected. Growth in cloud
business accelerated from prior quarters, with revenues from public cloud products growing in double digits
and AI-related product revenue delivering triple-digit growth. Bloomberg Intelligence: Alibaba’s steeper-than
expected drop in fiscal 2Q Taobao-Tmall profit, despite meeting consensus for a wider sequential ex-direct
revenue gain of 3.5%, raises the risk that 3Q earnings may slide below last year’s level, analyst Catherine Lim
writes. - Palantir jumps 11% to a record after announcing move to Nasdaq
Palantir continued its torrid run on Friday, with the stock popping after the company said it was moving to
the Nasdaq from the New York Stock Exchange. The shares are now up more than 45% since the company’s
better-than-expected earnings report last Monday, a day before Election Day. The company said the stock
will begin trading on the Nasdaq on Nov. 26, and will keep its ticker symbol PLTR. - Shares of several vaccine makers declined after President-elect Donald Trump selected prominent
vaccine skeptic Robert F. Kennedy Jr. as health secretary
Shares of Moderna and Pfizer slipped 7.3% and 4.7%, respectively. BioNTech, which helped develop a Covid
vaccine with Pfizer, shed 3.7%, while GSK declined 1.9%. Kennedy’s appointment could have important
implications for recommended vaccines and the funding of programs that distribute them, Jason Schwartz, an
associate professor at the Yale School of Public Health, said. CDC’s vaccine recommendations lead to
coverage requirements for private insurance plans and the Vaccines for Children program that allow
individuals to obtain them without paying out of pocket, Schwartz said. In several post-election interviews,
Kennedy said he won’t take vaccines away, and would let Americans decide the issue. While states set
vaccine requirements for school children, the CDC issues vaccine recommendations that states often rely on
to make those decisions. - Alcoa Corp. rose 6.8% as aluminum jumped after China canceled a tax rebate on exports of certain
commodities
China said it would cancel a tax rebate that’s helped fuel a decades-long boom in exports and shielded an
industry prone to overcapacity. China’s aluminum industry historically has exported significant amounts of
the metal as semi-finished products, which are used in value-added manufacturing or simply re-melted into
commodity-grade shapes. The tax rebate, applied across a range of aluminum products including pipes,
plates, sheets and strips, was staggered up to 13%. It was also removed for copper and lowered for some
refined oil, solar, battery and non-metallic mineral products. Its removal, enforced from December, is likely to
restrict flows from the country in the short term, analysts from Shanghai Metal Market said. Still, the capacity
for output growth elsewhere is limited, so Chinese producers have room to shift tax cost to overseas buyers,
they said. - Samsung shares climb more than 7% after surprise $7 billion buyback plan
Shares of Samsung Electronics jumped on Monday after the company unveiled a surprise plan to buy back
about 10 trillion South Korean won ($7.19 billion) worth of its own stock over the next 12 months. The South
Korean tech giant’s stock rose more than 7% in Seoul, after shares had already surged 7.21% on Friday,
following news that the company reached a preliminary agreement with its largest workers union, which
went on strike in July.
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