- Asian Shares Fluctuate with US Elections in Focus: Markets Wrap
Asian equities traded in a tight range as investors prepared for the US election and key economic data that will set the stage for the next Federal Reserve decision. Shares gained in Tokyo and Australia while equities in China, Hong Kong and South Korea retreated. US futures edged lower after most major groups in the S&P 500 gained at the start of the busiest week for corporate earnings. Treasury yields slipped. - Dow closes more than 250 points higher, S&P 500 rises as softening oil prices lift stocks
Stocks jumped Monday as investors looked for a batch of mega cap technology earnings to keep driving the Nasdaq Composite to new heights this week. A cooling geopolitical situation also aided risk sentiment. The S&P 500 gained 0.27% to close at 5,823.52. The Dow Jones Industrial Average advanced 273.17 points, or 0.65%, to end at 42,387.57. The Nasdaq rose 0.26%, closing at 18,567.19. Weekend airstrikes by Israel against Iran did not target oil or nuclear facilities as was feared, and oil futures sold off on the day. U.S. crude futures were down 6%, along with international benchmark Bren. - Gold prices hover near record peak on U.S. election jitters
Gold prices lingered near record highs on Tuesday, supported by uncertainty surrounding the upcoming U.S. presidential election, while investors awaited key economic data for clues on the Federal Reserve’s interest rate trajectory. Spot gold was up 0.5% at $2,755.42 per ounce, as of 0226 GMT. Prices hit a record high of $2,758.37 last Wednesday. U.S. gold futures gained 0.4% to $2,768.10. “The lead-up to the upcoming U.S. elections may continue to offer traction for its status as a hedge against market turbulence, further supported by a temporary breather in the U.S. dollar and Treasury yields overnight,” IG market strategist Yeap Jun Rong said. - Japan’s political instability could cloud economic policy, herald ‘revolving door’ of prime ministers
While the policy outlook is uncertain, analysts said any economic package could be more populist, with social spending and tax cuts. Analysts also predict a short tenure for current Prime Minister Shigeru Ishiba, with one noting that this could see Japan return to an era of “revolving door” prime ministers. - Oil steadies after 6% plunge with focus on Middle East risk
Oil steadied after tumbling 6% on Monday, the biggest decline in more than two years, as the market focused on the prospect for easing hostilities in the Middle East and upcoming US economic data. Brent was higher near $72 a barrel and West Texas Intermediate was just below $68. Israel signalled it was open to a short truce in Gaza in exchange for the release of a small number of hostages, following a retaliatory strike on Iran over the weekend that spared the OPEC producer’s oil infrastructure. The deep plunge on Monday comes ahead of a crucial few weeks for oil prices, with the US election looming and the OPEC+ alliance planning to start gradually reviving production in December. - Japan Risks Turning Inward Just as World Braces for Trump Return
Japan risks entering a renewed phase of policy stasis just as the world prepares for the possible return of Donald Trump to the White House and the pressure that would bring on key US allies. An election on Sunday left Japan without a clear winner for the first time since the 1990s, all but guaranteeing that a weak government will run the world’s fourth-largest economy. For now, that will be headed by Prime Minister Shigeru Ishiba, who indicated Monday that he has no plans to step aside even after his ruling Liberal Democratic Party failed to win a majority for the first time since 2009, when the main opposition group won in a landslide. - Xi Stimulus Clues Found in Protest Data Showing Economic Stress
To figure out how far President Xi Jinping will go to revive his struggling economy, a growing number of money managers are taking cues from a once-jailed Chinese dissident now living in Canada. From a basement in Calgary, often accompanied by his pet cat, Lu Yuyu spends 10 hours a day scouring the internet to compile stats on social instability before they are scrubbed by China’s censors. The 47-year-old exile won’t reveal his exact method because it risks jeopardizing the overall goal of the project called “Yesterday,” which documents cases of group protests. “These records provide an important basis for people to understand the truth of this period of history,” said Lu, who started the effort in January 2023 but didn’t make it public until he arrived in Canada a year ago. “I didn’t want to go to jail again,” he explained. - Israel Passes Law to Restrict UN’s Main Aid Agency for Gaza
Israel’s Knesset has passed a bill to sharply restrict the main United Nations organization supporting Palestinians, further threatening the already slow flow of humanitarian aid to displaced people in Gaza. The decision to all but ban the UN Relief and Works Agency, or UNRWA, comes despite renewed calls by Israel’s European allies as well Canada, Australia and Japan not to press ahead with the legislation. The Biden administration also has pushed Israel to increase aid deliveries to the Gaza Strip, saying a US law may require reducing the flow of American weapons to Israel unless the situation improves. The bill, which became final after being approved in second and third readings by the Knesset, bans the agency’s activities within Israel’s territories. While this technically doesn’t include Gaza and the West Bank, the organization would be greatly affected as its day-to-day operations and logistics require coordination with Israel and the use of Israeli-controlled land and crossing points. - Surprise US Election Haven for Some Investors Is Embattled Yen
For all the weakness in the yen this year, history shows that Japan’s currency is still in the running to be a surprise haven for investors seeking shelter from the US presidential election. Japan’s currency has beaten the greenback, Swiss franc, gold, Treasuries and euro among the most popular safe assets ahead of past elections, data compiled by Bloomberg show. In the run-up to the Nov. 5 vote, the yen is again the top performer during periods of extreme market stress, according to a Bloomberg analysis of moves in haven assets and implied volatility of US stocks. The propensity of traders to turn to the yen when markets fluctuate wildly comes despite its status as the worst performing Group-of-10 currency this year. Former president Donald Trump has edged ahead of Democratic nominee Kamala Harris in betting markets, putting pressure on investors to game plan what a second Trump presidency would spell for assets everywhere. - Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter expectations
Ford guided to the low end of its previously announced 2024 earnings forecast as it slightly topped Wall Street’s third-quarter expectations. The automaker now expects adjusted earnings before interest and taxes, or EBIT, of about $10 billion, down from a range of between $10 billion and $12 billion. Ford’s third-quarter results were led by its “Pro” commercial and fleet business as well as its traditional operations, known as “Ford Blue.” - Asia-Pacific markets trade mixed, Nikkei extends previous day’s gains
Asia-Pacific markets traded mixed in spite of gains on Wall Street as investors looked toward a slate of mega cap technology earnings to keep propelling the Nasdaq Composite to new heights this week. Japan’s Nikkei 225 added 0.68%, extending gains from the day before. This comes after the ruling Liberal Democratic Party lost its parliamentary majority after voters cast their ballots on Sunday to determine the control of the lower house, marking the first time since 2009 that Japan’s ruling coalition lost its majority. - Trump accuses Taiwan of stealing U.S. chip industry. Here’s what the election could bring
Former President Donald Trump, on a Joe Rogan podcast, accused Taiwan of stealing America’s chip industry and said he’d put a tariff on Taiwan’s chips. Nvidia and every hyperscale depend on Taiwan’s chips to build AI models. Citi says tariffs would increase costs across the entire technology supply chain. - Chinese IPOs in the U.S. and Hong Kong are set to increase next year, analysts say
“Chinese companies are becoming increasingly interested in getting listed in Hong Kong or New York, due to difficulty in getting listed in Mainland China and pressure from shareholders to quickly achieve an exit,” said Marcia Ellis, Hong Kong-based global co-chair of private equity practice, Morrison Foerster. Few large China-based companies have listed in New York since the Didi IPO in the summer of 2021 increased scrutiny by U.S. and Chinese regulators on such listings. - Royal Philips NV fell 16.9% after the medical technology firm slashed its annual sales-growth forecast on tepid demand in China.
Philips expects comparable sales to grow as much as 1.5% in 2024, down from a previous forecast of as much as 5%. Order intake decreased 2% in the third quarter due to the China slump. The manufacturer has been affected by an anti-corruption campaign across China’s health-care sector after the Asian nation began to scrutinize local medical-technology procurement. The country has implemented strict domestic product requirements for many categories. - Boeing launched a nearly $19 billion share sale, one of the largest ever by a public company, to address the troubled plane maker’s liquidity needs and stave off a potential credit rating downgrade to junk.
The company offered to sell 90 million common shares and about $5 billion of depositary shares, according to a statement Monday. The common-share portion alone would total just under $14 billion. The depositary shares will represent a 1/20th interest in newly issued mandatory convertible preferred stock that will convert in October 2027, or earlier, based on a pre-determined formula. - Nio shares jumped 10.5% following Macquarie’s upgrade to outperform from neutral.
Analyst Eugene Hsiao sees accelerating volumes in the current quarter due to strong Onvo L60 orders. October is the first full month for shipments of Nio’s new Onvo brand. The Onvo L60 midsize SUV has a low starting price of about $30,000 and is intended to take on Tesla’s Model Y. - Cadence Design Systems shares rose 5.8% in afterhours trading, after the application software company reported third-quarter results that beat expectations and raised the low end of its full-year forecast.
THIRD QUARTER RESULTS: Adjusted EPS $1.64 vs. $1.26 y/y, estimate $1.45. Revenue $1.22 billion, +19% y/y, estimate $1.18 billion. Adjusted operating margin 45% vs. 41% y/y, estimate 41.5%. Adjusted net income $450.2 million, +31% y/y, estimate $397.5 million. YEAR FORECAST: Sees adjusted EPS $5.87 to $5.93, saw $5.77 to $5.97, estimate $5.89. Sees revenue $4.61 billion to $4.65 billion, saw $4.60 billion to $4.66 billion, estimate $4.63 billion. Sees adjusted operating margin 42% to 43%, saw 41.7% to 43.3%, estimate 42.5%. - Yen remains under pressure after Japan election
The yen hit three-month lows against the dollar on Monday, remaining under pressure as an election loss by Japan’s ruling coalition raises political and monetary policy uncertainty, while the U.S. dollar headed for its biggest monthly gain since April 2022. The dollar rose by as much as 1% to a high of 153.88, the yen’s weakest level since late July. The yen was last down about 0.6% on the dollar at 153.24, bringing the decline in October to 6.3%, the largest of any G10 currency. - HSBC announces fresh $3 billion share buyback as third-quarter earnings beat expectations
HSBC reported third-quarter pre-tax profit of $8.5, a 10% rise compared to the $7.7 billion posted a year ago. Quarterly revenue grew 5% to $17 billion from the $16.2 billion that was reported a year ago. The bank also announced a fresh $3 billion share buyback, bringing the total amount announced this year to $9 billion. - Bitcoin briefly tops $70,000 for the first time since June as investors await earnings, Election Day
Bitcoin briefly climbed above $70,000 as investors braced themselves for MicroStrategy earnings and counted the days to the U.S. presidential election. The price of bitcoin was last higher by about 3% at $69,925.00, according to Coin Metrics. At about 6:00 p.m. Eastern on Monday, it touched $70,207.02 and has been oscillating since. Stocks tied to the price of the cryptocurrency were little changed in extended trading. In regular trading on Monday, crypto exchange platform Coinbase gained 5% and bitcoin proxy MicroStrategy jumped nearly 9%. - US-listed Taiwan Semiconductor Manufacturing ADRs fell 4.3% Monday following news reports that the company violated trade restrictions with China.
Reuters reported that Taiwan Semiconductor, better known as TSMC, has suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor. Huawei is restricted from buying such chip technology to protect U.S. national security. TSMC could face penalties from the U.S. Department of Commerce if it willfully violated U.S. export controls with China.
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