- Asian Shares Pare Gains as Focus Switches to China: Markets Wrap
Asian equities pared gains Friday as investors awaited the outcome of a key legislature meeting in China
that’s expected to unveil policy support to boost flagging growth. China’s CSI 300 Index gave up an early
advance as traders debated whether any measures from the meeting of the Standing Committee of the
National People’s Congress, the equivalent of parliament in China, will be enough to counter the threat of
higher tariffs under a second Donald Trump presidency. - S&P 500, Nasdaq close at records and extend postelection rally as Fed cuts rates
The S&P 500 and Nasdaq rose Thursday, extending Wall Street’s rally in the wake of President-elect Donald
Trump’s victory, as traders weighed the latest rate cut from the Federal Reserve. The S&P 500 gained 0.74%
to close at a record high of 5,973.10. The Nasdaq Composite advanced 1.51% to reach 19,269.46, its first
close above 19,000. The Dow Jones Industrial Average was little changed, ticking down less than one point to
43,729.34. All three indexes hit intraday record highs during the session. The moves built on a surge in stocks
Wednesday after Trump’s win, which included a 1,500-point gain for the Dow. The S&P 500 jumped 2.53% for
its best postelection day in history. - Oil rises as investors digest Fed cut, U.S. election fallout
Oil prices rose on Thursday, as the market continued to weigh the consequences of a Trump presidency and
the Federal Reserve’s latest decision on interest rates. Brent crude oil futures rose 71 cents, or 0.95%, to
close at $75.63 a barrel. U.S. West Texas Intermediate gained 67 cents, or 0.93%, to settle at $72.36.
Donald Trump’s election win initially triggered a sell-off that pushed oil down more than $2 as the dollar
rallied. But crude prices later pared losses to settle at a less than 1% decline by the end of Wednesday’s
session. - Gold holds firm after U.S. Fed rate cut, softer dollar
Gold prices rose more than 1% on Thursday, helped by a retreat in the U.S. dollar, while the Federal Reserve
cut interest rates by a quarter of a percentage point as widely expected. Spot gold was up 1.2% at $2,691.36
per ounce, after dropping to a three-week low on Wednesday. U.S. gold futures settled 1.1% higher at
$2,705.80. At the end of a two-day policy meeting, the U.S. central bank lowered the benchmark overnight
interest rate to the 4.50%-4.75% range, with policymakers taking note of a job market that has generally eased.
Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion. - Federal Reserve cuts interest rates by a quarter point
The Federal Reserve approved its second consecutive interest rate cut Thursday, moving at a less aggressive
pace than before but continuing its efforts to right-size monetary policy. In a follow-up to September’s big
half percentage point reduction, the Federal Open Market Committee lowered its benchmark overnight
borrowing rate by a quarter percentage point, or 25 basis points, to a target range of 4.50%-4.75%. The rate
sets what banks charge each other for overnight lending but often influences consumer debt instruments
such as mortgages, credit cards and auto loans. - China expected to announce highly anticipated fiscal stimulus package
Chinese authorities have ramped up stimulus announcements since late September, sparking a stock rally.
While the People’s Bank of China has already cut several interest rates, major increases in government debt
and spending requires approval by the country’s parliament, called the National People’s Congress. That
approval could granted during a weeklong meeting of the legislature’s standing committee, with more
stimulus expected to be unveiled on Friday. - Powell Signals Readiness to Defy Trump in Defense of Fed
Federal Reserve Chair Jerome Powell made clear he’s ready to defend the US central bank from political
pressure following the re-election of Donald Trump, saying he wouldn’t resign if asked and insisting the
incoming president doesn’t have the power to fire him or other senior Fed leaders. “No,” Powell said firmly
on Thursday, when asked whether he would step aside if Trump asked for his resignation. - Environmentalists Caution Republicans Over Gutting Climate Law
Climate activists are warning congressional Republicans and President-elect Donald Trump that efforts to
dismantle the 2022 tax-and-climate law could backfire because they would threaten thousands of clean-
energy jobs, particularly in red states. The clean energy boom is just getting started because of the Inflation
Reduction Act, Lori Lodes, executive director of Climate Power, said Thursday. Many Republican lawmakers
and governors, including Oklahoma Gov. Kevin Stitt, embrace the economic opportunities clean-energy
spending from the law is delivering to their communities, she said. - Bank of England cuts rates, sees gradual reductions ahead as Labour budget boosts inflation forecast
The Bank of England cut interest rates by 25 basis points Thursday while raising its inflation forecast as
Labour’s bumper budget announcement muddies the outlook for future policy easing. The BOE’s Monetary
Policy Committee voted 8-1 in favour of the decision to bring the bank’s key rate to 4.75%. It marks the
central bank’s second such trim this year, after it began its easing cycle in August. Policymakers pointed to a
continued easing of inflation as a factor influencing their decision, but noted that the government’s fiscal
plan had led to a raise in their forecasts for growth and inflation. The bank now sees inflation rising by 0.5
percentage points, more than previously forecast, to hit a high of around 2.75% next year before falling back
to its 2% target. Growth, meanwhile, is seen increasing by around 0.75% in a year’s time. - Germany appoints new finance minister as pressure for quick snap elections mounts
Jörg Kukies was appointed as Germany’s new finance minister on Thursday, as pressure mounts on
Chancellor Olaf Scholz to call for a confidence vote and trigger snap elections after the dissolution of his
ruling coalition. Kukies is replacing Christian Lindner, who was sacked by Scholz late on Wednesday. Scholz
announced he would hold a confidence vote in January, with the view of March elections, but pressure is
growing on him to expedite this timeline. - JPMorgan Chase & Co shares fell 4.3% after Baird analysts downgraded the stock to underperform,
urging investors to take profit on the US investment bank due an unattractive risk-reward
We know we are fighting the tape here, but believe it makes sense to sell the stock given what we see as
limited upside, Baird’s David George wrote, becoming only the second analyst to have a sell-equivalent rating
on the lender. The stock has 17 buys and eight holds, according to data compiled by Bloomberg. While
George views JPMorgan as a best-in-class business, he flags that the shares are expensive with investors
paying a peak multiple on peak earnings. The stock jumped 12% on Wednesday to a record high after Donald
Trump won the US presidential election, with bets ramping up that the former president will make good on
his promise to cut regulation of the industry. JPMorgan has been strong performer this year as its investment
banking revenues have defied analyst expectations, with shares up 45% in their best annual gain in more
than 20 years. - Gilead shares rose 6.8% after the drugmaker boosted its full-year guidance for adjusted profit and
product sales. Analysts note strength in the firm’s HIV franchise as well as its Covid treatment, Veklury, in
the third quarter
THIRD QUARTER RESULTS: Adjusted EPS $2.02 vs. $2.29 y/y, estimate $1.50. Adjusted gross margin 86.8%,
estimate 85.4%. Revenue $7.55 billion, +7% y/y, estimate $7 billion. Adj. R&D expense $1.38 billion, -4.9%
y/y, estimate $1.53 billion. CONTEXT: Generated $4.3 billion in operating cash flow. Paid dividends of $983
million and repurchased $300 million of common stock in 3Q. YEAR FORECAST: Sees adjusted EPS $4.25 to
$4.45, saw $3.60 to $3.90, estimate $3.80. Sees product sales $27.8 billion to $28.1 billion, saw $27.1 billion
to $27.5 billion, estimate $27.47 billion. Needham, Joseph Stringer (hold): Says the top-line beat was driven
by the strong performance from HIV products and better-than-expected Veklury sales. The HIV franchise
continues to perform well and is in line to be a long-term value driver for GILD. We look for more growth
opportunities from the Liver/Inflammation and Oncology pipeline to get more constructive.
RBC Capital Markets, Brian Abrahams (sector perform, PT to $81 from $75): Though driven mostly by
fluctuating HIV pricing and Veklury, a beat is still a beat, and with continued good opex control, GILD’s strong
operational execution continues. We acknowledge GILD’s fortunes seem to have turned around, but still
tough for us to quite get to current levels on a DCF (discounted cash flow) basis, keeping us neutral on shares. - Three months ago, travel companies warned that the great post-pandemic boom in consumer travel
was losing steam
Over the past week, three of some of the largest online reservation companies, Airbnb Inc., Booking Holdings
Inc. and Expedia Group Inc., painted a less dramatic picture: They all issued strong outlooks that suggested
growth isn’t slowing as fast as expected. Airbnb said Thursday it expects an acceleration on the key metric of
nights and experiences booked, with the growth rate expected to exceed the 8.5% achieved in the third
quarter. Wall Street had projected a 7.7% gain. Expedia, which also reported results on Thursday, said it was
raising its full-year gross bookings growth guidance to 5% from 4%. Expedia was up 5.2% in after-hours
trading. Airbnb shares fell 4.4% after initially rising when the company’s results were first announced. A week
earlier, Booking, the parent to brands like Kayak and Priceline, offered surprisingly optimistic guidance,
sending its own shares soaring. Airbnb’s third-quarter nights booked and adjusted earnings beat
expectations. The firm said it saw slight acceleration in nights booked in the EMEA region, buoyed by the
summer Olympics in Paris. Latin America and the Asia Pacific region continued to drive growth with double-
digit bookings gains and record increases in active listings. In particular, the company said it was encouraged
by the recovery of the outbound China business even though progress has been gradual. - Nissan shares plunge over 10% after downbeat quarterly results, production-cut plans
Shares of Japanese automaker Nissan tumbled as much as 10.12%, a day after the company posted
downbeat quartely results and said it would reduce global production capacity by 20%. Operating profit in
the second quarter plunged almost 85% year-on-year to 31.9 billion yen, while revenue dropped 5% to 2.99
trillion yen. Nissan scrapped interim dividend and year-end dividend outlook, with top executives taking
voluntary pay cuts. - How Samsung fell behind in the AI boom leading to a $126 billion wipeout
Samsung Electronics has fallen behind long-time rival SK Hynix in the area of high-bandwidth memory. HBM
is a key component of Nvidia’s chip architecture that is used to train large artificial intelligence models.
Samsung is still awaiting Nvidia to approve its HBM for use, which could help the South Korean giant become
competitive again, analysts said.
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