Global Market Quick Take: Asia – November 7, 2024

Key points:

• Macro: China Balance of Trade, BoE Interest Rate Decision, US Initial Jobless Claims & nonfarm productivity, Fed Interest Rate Decision
• Equities: US stocks close at record highs after Trump's 2024 Election victory
• FX: USD strengthened across the board after Trump’s 2024 Election victory
• Commodities: Trump's win boosts dollar, causing copper, silver, gold to drop sharply
• Fixed income: 30-year yield had largest one day gain since June 2022

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US Presidential Election - Donald Trump won the US Presidential election, securing 277 electoral votes, surpassing the 270 needed, with key victories in Pennsylvania, Georgia, and North Carolina. The Republican party regained Senate control. Investors are optimistic that Trump's second term will promote business through tax cuts, deregulation, and tariffs, potentially boosting economic growth, corporate profits, and inflation.

Equities: 

• US – US stocks hit record highs after Trump's 2024 election win, with the S&P 500 up 2.5%, Nasdaq up 2.9%, and Dow Jones rising 3.6%. Driven by expectations of pro-business policies like tax cuts, deregulation, and tariffs boosting economic growth and earnings. Financials, energy, and industrials led the rally, with JPMorgan and Wells Fargo up 11.5% and 13.5%, Nvidia up 4%, and Tesla up 14.7%.
• Europe - STOXX 50 fell 1.5% and STOXX 600 dropped 0.5% as Trump's election win raised concerns over potential tariffs. The auto sector was hit hard, with BMW down 7% due to profit decline.
• Hong Kong – HSI fell 2.2% on Trump election concerns and US-China trade tensions. Chinese stocks dipped as investors awaited policy updates and the Fed's decision. Further stimulus details are expected from China's National People’s Congress.
• Earnings – Moderna, Airbnb, Block, Pinterest, Rivian, DraftKings, Unity, Affirm

FX:

• US Dollar Index climbed over 2%, trading above 105, highest in four months as Trump was re-elected as President of the United States. Trump secured over 270 electoral, winning key swing states like Pennsylvania. His policies are expected to focus on reducing taxes and imposing tariffs on foreign goods. The US Dollar strengthened across the board, especially against currencies of countries facing potential tariffs. EURUSD at 1.0730, USDJPY 154.30, USDCNH 7.1980 and USDMXN 20.17.

Commodities:

• Gold fell 3.1% below $2,659 from a record $2,758 on October 30, as Donald Trump's U.S. presidential win strengthened the dollar, prompting investors to sell gold. Silver also dropped 4.5%below $32.
• Copper futures fell 5.1% to $4.25 per pound, their lowest in over a month, after Donald Trump's U.S. presidential win boosted the dollar and raised tariff concerns.
• WTI crude oil futures dropped slightly to $71.69, as investors weighed Trump's policies. A second Trump term could boost U.S. growth, but tariffs may reduce China's oil demand. Brent crude oil futures steadied to $72.92.

Fixed income:

• U.S. Treasury yields ended slightly below their highs but remained up to 17 basis points higher on the long end. The bear steepening trend eased after a strong 30-year bond auction. Yields increased by 8 to 17 basis points across the curve, with 2s10s and 5s30s spreads widening.
• Japan's Ministry of Finance plans to auction ¥2.6 trillion in notes with a maturity date of September 2034.

For a global look at markets – go to Inspiration.