- Most Asian Stocks Gain as Traders Mull Trump, Fed: Markets Wrap
Most Asian shares rose, following their US peers higher, as investors positioned for a second Donald Trump
presidency and an expected Federal Reserve interest-rate cut. Equity gauges rallied in Hong Kong and China
on expectations that Beijing will roll out more stimulus. That was after the S&P 500 surged 2.5% Wednesday,
its best post-election day in history, and the Nasdaq 100 advanced 2.7%. The Fed is forecast to trim its
benchmark rate by a quarter point Thursday. - Dow soars 1,500 points to record high in best day since 2022 after Trump election win
Stocks rallied sharply on Wednesday, with major benchmarks hitting record highs, as Donald Trump won the
2024 presidential election. The Dow Jones Industrial Average surged 1,508.05 points, or 3.57%, to a record
close of 43,729.93. The last time the blue-chip Dow jumped more than 1,000 points in a single day was in
November 2022. The S&P 500 also hit an all-time high, popping 2.53% to 5,929.04. The Nasdaq Composite
climbed 2.95% to a record of its own of 18,983.47. The small-cap benchmark Russell 2000 surged 5.84%,
hitting a 52-week high. Small companies, which are more domestic-oriented and cyclical, are believed to
enjoy outsized benefits from Trump’s tax cuts and protectionist policies. - Oil prices regain ground as investors eye U.S. election fallout
Oil prices edged up on Thursday following a sell-off triggered by the U.S. presidential election, as risks
to oil supply from a Trump presidency and a hurricane building in the Gulf Coast outweighed a stronger U.S.
dollar and higher inventories. Brent crude oil futures rose 26 cents, or 0.35%, to $75.18 per barrel by 0125
GMT. U.S. West Texas Intermediate (WTI) crude gained 16 cents or 0.22% to $71.85. - Gold hastens retreat as dollar rallies on Trump victory
Gold prices slid more than 3% to a three-week low on Wednesday as investors piled into the U.S. dollar after
Republican Donald Trump was elected U.S. president. Market participants were also looking ahead to the
Federal Reserve’s interest rate decision on Thursday for further clues on the bank’s easing cycle that had
helped gold’s stunning rally to successive record highs this year. Spot gold slipped 3% to $2,660.1 per ounce
after hitting a three-week low of $2,652.19. The metal was on track to post its biggest daily loss in five
months. U.S. gold futures shed 2.9% to $2,669.2. - Harris Concedes Election to Trump, Urges Fight for Ideals
Vice President Kamala Harris told supporters to accept her election loss at the hands of President-elect
Donald Trump but urged them to keep fighting for the ideals she espoused in her campaign as she publicly
conceded the 2024 presidential race. - Trump’s Victory Casts a Shadow Over the Federal Reserve
Donald Trump’s victory in Tuesday’s presidential contest threatens to upend the US economic outlook and
alter the Federal Reserve’s policy calculus in the months ahead, while renewing questions about how fiercely
he might pressure the central bank during his second term in the White House. In his campaign, Trump
promised to wield tariffs more aggressively against US trading partners, deport millions of undocumented
immigrants and extend his 2017 tax cuts. Those policies, if enacted, could put upward pressure on prices,
wages and the federal deficit, according to many estimates. - Xi Is Better Prepared for Trump Even as 60% Tariffs Risk Chaos
When Donald Trump first started a trade war with China in 2018, Beijing found itself on the back foot and
unsure of how to respond. This time President Xi Jinping is better prepared for a fight, even as he has more to
lose. Trump, who won a second term as president in an election on Tuesday, has threatened to put tariffs of
as much as 60% on Chinese goods, a level that Bloomberg Economics says will decimate trade between the
world’s biggest economies. That’s on top of a range of export controls on advanced technology that the
Biden administration has only tightened since Trump left office. - Trump win heightens risks for BOJ as yen renews slide
A dollar rally triggered by Republican Donald Trump’s victory in the U.S. presidential election could heighten
pressure on the Bank of Japan to raise interest rates as soon as December to prevent the yen from sliding
back toward three-decade lows. Trump’s victory in the U.S. presidential election unleashed sharp dollar gains,
as expectations of tax cuts and tariffs on imports drove optimism about economic growth while fueling
worries about inflation. - Scholz Calls for Snap Vote in Germany After Firing Finance Chief
German Chancellor Olaf Scholz called for a snap election after his fractious, three-way coalition finally
collapsed over how to revive the lackluster economy. The political crisis came to a head after Scholz
dismissed his finance minister, Christian Lindner, saying that the chairman of the pro-business FDP party had
refused a proposal to suspend rules limiting new borrowing to help plug a shortfall in next year’s budget.
Scholz called for a confidence vote in his government in January, with a goal of pulling forward next year’s
federal election to March. - China October exports record highest jump in 19 months, imports decline more than expected
Exports rose by 12.7% in October from a year ago in U.S. dollar terms, while imports declined by 2.3%,
customs data showed. The world’s second-largest economy has been grappling with weakening domestic
consumption and a protracted property crisis, with exports being a rare bright spot. - Stellantis to indefinitely lay off 1,100 workers at Jeep plant in Ohio
Stellantis announced plans Wednesday to cut a manufacturing shift and indefinitely lay off roughly 1,100
workers at a Jeep plant in Ohio. The company has been battling high inventory levels and lower earnings this
year. The Toledo South Assembly plant produces the Jeep Gladiator pickup truck. - BMW AG’s main measure of profitability fell to the lowest in more than four years in the third quarter
as a costly recall and weak demand in China weighed on earnings
The company’s auto-making margin before interest and taxes slumped to 2.3%. That’s well below its 2024
target of at least 6% and the lowest since the second quarter of 2020. BMW walked back its outlook for the
year in September after a faulty braking system, supplied by Continental AG, forced it to recall as many as 1.5
million vehicles. The company has set aside a provision of almost €1 billion to fix the defects and had to
temporarily halt deliveries of hundreds of thousands of higher-priced vehicles. BMW shares fell 6.2%, also
weighed down by the US election, where former President Donald Trump, who has threatened to raise tariffs
on imported cars, was nearing a win. In China, BMW’s biggest market, sales plummeted 30% in the three
months through September as consumers cut back on luxury spending and local carmakers offered less
expensive alternatives. BMW expects demand to remain muted in the biggest auto market also in the current
quarter, Chief Financial Officer Walter Mertl said. He added that the recall accounted for more than half of
the company’s slump last quarter in China. The German manufacturer’s sales declined in every region in the
third quarter, though it did have some success with EVs. Deliveries of battery-powered BMWs, such as the i4
sedan and iX1 sport utility vehicle, rose 10% from a year earlier. Lower sales volumes and higher inventory
levels due to the recall resulted in negative free cash flow of €2.48 billion in the third quarter. BMW aims to
reduce inventory levels to the previous year’s level in the final three months of the year and confirmed its
outlook of reaching annual free cash flow of more than €4 billion. - Credit Agricole SA posted higher-than-expected third-quarter profit as its debt traders outperformed
rivals, but analysts focused on disappointing revenue in insurance and consumer finance
Net income for the three months through September came in at €1.67 billion, just ahead of estimates. Still,
that was 4.7% lower than a year earlier due to base effects, the bank said. Chief Executive Officer Philippe
Brassac reiterated his expectation to hit a goal of annual adjusted profit of more than €6 billion in 2024, one
year ahead of plan. The 6.2% gain for fixed income, currencies and commodities traders beat an average of
Wall Street and European peers. The bank’s investment banking business posted underlying revenue up by
more than a fifth. Other areas of the bank didn’t perform as well as some analysts had estimated. Jefferies
said expected strength in insurance revenue was dashed by weather related crop claims, while consumer
finance saw less momentum than anticipated. Credit Agricole’s expenses rose 9.2% to €3.69 billion after it
invested to support growth, including at the corporate and investment bank. In the quarter, that division
failed to meet the bank’s medium-term goal of keeping costs to less than 55% of revenue, although the bank
said the ratio is improving and remained below the threshold during the first nine months as a whole. - CVS Health shares jumped 11.3% after the pharmacy chain reported third-quarter results that were in
line with the firm’s preliminary announcement. CVS is also among health insurers rallying in Wednesday
trading on expectations of what a second Trump administration would mean for the industry
CVS announced new management changes and didn’t give guidance on the company’s expected financial
performance for 2024 or 2025. THIRD QUARTER RESULTS: Net revenue $95.43 billion, +6.3% y/y. Adjusted
EPS $1.09 vs. $2.21 y/y. Comparable sales +15.5% vs. +8.8% y/y. Adjusted operating income $2.55 billion, –
43% y/y. Raymond James, John W. Ransom (outperform): Notes CVS reported 3Q24 results that were in line
with its pre-announcement with better-than-expected revenues. - Cryptocurrency-related stocks soared after investors bet that a Trump presidency would lead to a more
supportive regulatory environment
Shares of Coinbase surged 31% and MicroStrategy rose 13% as bitcoin rallied to a new record high. Bitcoin
rose as much as 10% to $76,106. The increase was the most since March, when investors were cheered by
inflows into US Bitcoin exchange-traded funds. - Johnson Controls rose 8.8% as the HVAC equipment maker posted fiscal 4Q adjusted earnings per share
that beat and provided fiscal 1Q profit guidance range that also topped estimates
FOURTH QUARTER RESULTS: Adjusted EPS $1.28 vs. $1.05 y/y, estimate $1.24. Net sales $6.25 billion, -9.5%
y/y, estimate $7.31 billion. FISCAL 1Q FORECAST: Adjusted EPS before special items of ~57c to 60c, est. 57c.
Management announced a restructuring plan that will lead to costs of about $400m over the next three
years. The efforts are expected to result in expected annual cost savings of approximately $500m. In July, the
company initiated a search for a new CEO as George Oliver plans to retire. - Qualcomm Inc. and Arm Holdings Plc, two chip companies heavily dependent on the smartphone
market, delivered earnings reports afterhours that showed an industry making a wobbly comeback
Both companies pointed to a resurgence in demand for high-end model devices, but stopped short of
signaling that the broader industry was on solid ground. Qualcomm’s report was better received, with a rosy
sales forecast helping send its shares up 6.8% in afterhours trading. A more tentative Arm outlook,
meanwhile, weighed on that company’s shares, sending it down 5%. The return of consumer spending on
expensive handsets, particularly in China, helped both companies’ revenue and profit top analysts’ estimates
last quarter. Expansion into new areas also shored up results. Qualcomm and Arm are pushing deeper into
computing, bringing a boost from artificial intelligence spending. And Qualcomm has made a successful foray
into automotive chips. The two companies — longtime partners that have increasingly become adversaries —
are seen as bellwethers for the smartphone industry. Qualcomm is the biggest seller of the processors that
power the devices, and Arm developed much of the underlying technology used by the industry. Both
companies have benefited from a shift to more upscale phones. At Arm, phone revenue jumped 40% despite
overall unit shipments only gaining 4%. Qualcomm also is getting a bigger share of the Chinese market.
Revenue from the sales of Android phones increased 40% in that country this year. For the coming year, the
company is predicting that overall phone units will grow roughly 5% or less — a sign it’s not anticipating a
wide recovery. Many consumers aren’t upgrading their devices as often, a problem that has plagued much of
the industry.
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